Container lines heading for ‘epic’ rate war, says furious shipper

With the world still reeling from the recession and in the middle of a fragile recovery, the container lines have made an aggressive move towards restoring their profitability.

However, charging record PSS is winning the lines no friends among their customers already frustrated at the shortage of containers.

We asked the logistics boss at large global shipper what his take on the issue was and his response was scathing.

“PSS is a fact of life, it will never go away,” he said. “Most of us large shippers are somewhat protected from it, in that we negotiate rates that are not subject to it.

“The problem for us sometimes arises in two ways. Either rates climb so high that we won't get space, or mysterious equipment issues arise when we attempt to book. Or when we exceed contracted volume in the peak, anything over and above that contracted volume is then subjected to every surcharge known to man, including PSS.

“Carriers are clearly determined to get rate levels back to, or above, 2008 levels, and equally determined to replenish their slunken coffers after the devastating fire that they, and only they themselves, built, lit and poured fuel on.

“And shippers are furious, because the surcharges that are the instruments of this policy are an insult to shippers' collective intelligence. It seems to shippers that any activity that ought to be part of a carrier's normal job can now be turned into a surcharge. Thus we now have the container repositioning surcharge and myriad other new additions to what was already an absurd alphabet soup.”

The absurdness of the host of surcharges was highlighted by shippers at the Trans Pacific Maritime conference in Long Beach this year. They said if carriers could get away with it, they would impose the JBWCA (Just Because We Can Additional) surcharge, and it would be followed by SUTWS (Showing Up To Work Surcharge).

“As much as I would like to sound an optimistic and conciliatory note, I honestly don't think this will end until the next rate war. A war which, inevitably, will once again be created and started by carriers in their never-ending pursuit of economies-of-scale (not to be shared) and larger market share (which, yes, they are still chasing).

“These wars, which used to result in fairly modest adjustments for a relatively short period, have in recent years grown more and more vicious and unforgiving. By their current actions, carriers are guaranteeing that the next one will be truly epic.”