Regarding the decision to shut down, Brian Conrad, TSA`s Executive Director, said that “the commercial and operational environment of Trans-Pacific trade and, more generally, global shipping, has undergone significant changes in recent years that are likely to continue into 2018 and beyond.” The TSA has been a strong voice for the maritime industry in the U.S. Trans-Pacific trade for nearly 30 years. Founded in 1989, the TSA was one of the first carrier discussion agreements concluded in the United States following the passage of the Shipping Act of 1984. In addition to the TSA`s trade initiatives, the agreement provided a forum for lines to discuss trade conditions, market developments, and trade and economic trends. The ability to maintain international rice sales rates is affected by annual and quarterly increases in shipment. The Westbound Trans-Pacific Stabilization Agreement (WTSA) consists of major shipping lines from the United States to Asia. The WTSA agrees on a general annual rate increase (GRI) for agricultural products (etc.) as well as quarterly bunker surcharges, in order to adapt variable variations such as fuel prices. The annual GRI can be an increase from $80 to $240 per 20 ft container of rice. “For many years, TSA has played a valuable role for airlines and other players in the industry,” said Conrad. “Line shipping is a privately funded infrastructure for Asian and U.S. trade. TSA has been a key element in maintaining and growing a wide range of airlines that are active in long-term trade and offer shippers the most comprehensive and reliable choice of service options.
He was also a strong advocate of the interests of airlines, both at the level of global regulators and the maritime authority. Because rice is a commodity with very low margins for sellers, a major rice supplier relies on Nippon Express to maintain profits by stabilizing shipping costs. The Trans-Pacific Stabilization Agreement (TSA) will officially close its doors on February 8, as the TSA “is no longer viable” due to “significant changes” in shipping. He added: “During these difficult maritime periods, it became clear that the TSA`s initial mission was no longer viable, but I believe that TSA has played an important role over the years in supporting the development of international trade in the United States. Nippon Express maintains relationships with the major suppliers of the WTSA and the possibility of offering carriers shipping activities in loss-making shipping lanes, thus filling their otherwise empty cargo ships returning to the United States. Nippon Express uses this relationship with airlines on behalf of its rice customers to mitigate GR increases.