OAKLAND, Calif.¡ªSpokesmen for one of the world¡¯s last remaining carrier cartels said that even collective pricing will not keep some carriers from withdrawing capacity on the transpacific trade lanes next year.
¡°No container line is in a position to run a scheduled service with ships running at less than full utilization, given current costs,¡± said Ronald D. Widdows, chairman of the Transpacific Stabilization Agreement (TSA). ¡°It¡¯s a safe statement that no carrier is operating profitably in the eastbound transpacific market today,¡± he added.
According to Widdows, rates have not kept pace with operating cost increases, and separate charges to address fuel and other costs have been ¡°routinely undercollected¡± in ¡°highly competitive¡± environment.
Industry analysts contacted by LM concurred with this assessment, noting that carriers are facing a conundrum.
¡°What many shippers fail to realize, is that even if a price war among carriers is staged next year, the result is that service levels will decline,¡± says Stephen Fletcher, commercial director for AXS Marine, a Paris-based shipping consultancy. ¡°Shippers can¡¯t have the cake and eat it, too.¡±
Not that there is any hint carriers in such a ¡°rate agreement¡± would stage such a free market turnaround. Michael Berzon, president of the shipper consultancy, Mar-Log, Inc. suggests that shippers should still seek the lowest rates, but then offer to collaborate with carriers to hedge their expenses.
¡°The whole issue of re-positioning boxes is something we must address,¡± he said. ¡°As shippers, we should be working with 3PLs to help move empty containers for outbound voyages, so that exporters can have the space they need without being a burden to the carriers.¡±
Meanwhile, TSA, along with some independent analysts, sees a turnaround beginning in the second half of 2009, with the carriers contending that they are justified in keeping fixed operating costs.
