TSA Expansion Update, Statement of Commissioner William P. Doyle: Westbound Transpacific Stabilization Agreement (WTSA) Suspended

Westbound Transpacific Stabilization Agreement (WTSA) Suspended

The member companies of the WTSA recently filed an amendment to the WTSA to suspend the underlying agreement. While it was effective when filed, the WTSA’s amendment remains subject to FMC jurisdiction. Accordingly, this agreement is effectively suspended as of May 1, 2013.

As a point of information, in mid-April 2013, I voted to take no further action to delay the effective date of the Transpacific Stabilization Agreement (TSA) amendment to include the westbound trans-Pacific trade. This Commission vote was triggered when TSA filed an amendment seeking a 24-month trial period to expand the geographic scope of the TSA.The amendment expanding the TSA became effective April 14, 2013.

As part of the package for expanding the TSA, all parties understood that the WTSA would have to be suspended. In its original form, TSA members did not have authority to discuss and reach an agreement on restricting capacity. Comparatively, the WTSA did permit its members to discuss and reach an agreement on restricting capacity. In contrast, once the TSA expansion became effective, the expanded TSA would not have the authority to discuss and reach an agreement on restricting capacity in either the inbound or outbound directions. TSA members can only exchange and discuss capacity information; they cannot discuss capacity rationalization. The filing of the WTSA amendment to suspend the agreement is the appropriate follow-up to formalize the agreement’s status.

Going forward, the Commission will continue to monitor the expanded TSA.

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