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Saturday, September 21, 2019

Maritime Logistics Professional

Carriers Are Dancing a Jig of Joy

Posted to Martin Rushmere (by on November 21, 2010

Lines are telling Congress what to do

What is one to say? The trans-Pacific carriers are taking a risky public stance by sneering at Congress's efforts to put a muzzle on rate discussion powers. First, previous chairman of the 15 lines that make up the TSA, Ron Widdows, gives a severe thrashing to the bill proposed by the now lame-duck session.
"This was truly a bad piece of legislation. "People understand this was well intended - it kind of went bad in the process of being developed. It didn't involve all the stakeholders, and didn't have the discussion you would want if you are going to have major revision to the Shipping Act. There is probably a way to advance the discussion, but the bill was not the way,"
Then the TSA discounts the likelihood of any clamp on its powers soon, or even in the next year, by slapping on a "suggested" rate increase   for contracts beginning in May next year. Not only that, but a peak season surcharge is heading down the sea lane for the period to November next year.
Chairman Y.M. Kim, very graciously says, "We said last year that we would not seek to recover all our losses in one year,” as if customers should be eternally grateful and are themselves to blame for the losses. Market analysts have pinpointed over-optimism by the lines, which resulted in stuffed order books for newbuilds, which led in turn to canceled orders and lay ups. 
Complacency mixed with arrogance is starting to creep in. The TSA is building a bubble around itself, taking an almost colonial approach of "We know what's best for the customers."
Clearly, the K Street lobbyists have told the carriers that they can sit back and relax, because the new congress will chuck out any attempt at antitrust restrictions. Meanwhile, airlines are being hammered for the very same activities and are paying huge fines. The lobbyists presumably have inside knowledge that shipping is safe.
They may well be right. But, if there is one attitude guaranteed to irritate a politician, it is being bossed around by outsiders. The carriers should be careful about publicly declaring that what they wish for is a done deal.
It's like a criminal telling a judge that the verdict is irrelevant because he has "friends" who will ensure that he goes free.

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