General Rate Increases for Shipping Cars Overseas
Carrier Rates - Impact on International Car Shipping
Chances are if you're in the business of international car shipping, you've already become acquainted with the term GRI. By definition, GRI stands for General Rate Increases which can adjust the price of freight rates across all trade and shipping routes or apply only to specific routes for a set period of time. Carriers must announce their intention to raise rates 30 days in advance as required by the Federal Maritime Commission.
What economic forces precipitate rate increases? According to the World Shipping Council, over the past two years most major carriers operated at a loss. More recently, there are signs of recovery as international trade expands. Increased demand is diminishing the surfeit of cargo space giving carriers more leverage in their cargo pricing. Many industry analysts believe carriers might even be profitable over the 2014-15 Period.
Have increases already gone into effect during the first 2 quarters of 2014? In January of this year, member lines who are party to the Transpacific Stabilization Agreement, (TSA) added an average $300 per 40-foot container (FEU) to existing rate levels. In March of 2014 another $300 per FEU went into effect with yet another comparable increase in May. TSA executive Brian Conrad explains that carriers are working to recoup costs incurred for fuel, chassis and free time in port.
Shipping Cars Overseas - What Does GRI Mean to Me
What actions can dealers take to mitigate GRI? Since the 2007 global recession, carriers have acted to eliminate over-capacity and turn poor earnings around. The trend has been toward forming alliances such as the G6 and P3, so called "super consortiums" in efforts to increase their bargaining power. What this means to you is that it has never been more important to select the best shipping partner possible. See the WCS advantage on Dealer Relationships and Shipping Classic Cars Overseas.
Why do dealers need a "shipping partner?" Why not chose what's most convenient? Classic car dealers understand the importance of proper handling from door to door - the cars are too valuable to risk being damaged. There is something else to also consider. A reliable, volume shipper like West Coast Shipping (WCS) has trusted relationships with major carriers around the globe, including Maersk, APL, Hapag-Lloyd, NYK, Hyundai Merchant Marine and others. These deep rooted connections make it possible for a company like WCS to negotiate space and price ahead of other shippers with less experience, history and track record - all to the benefit of WCS clients.