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Thursday, September 19, 2019

Maritime Logistics Professional

Hopes for Upsetting the Transpacific Container Cart

Posted to Martin Rushmere (by on April 1, 2010

Customers reckon they are in for a better deal

Shipping line customers on the West Coast are crossing their fingers that the new service by start-up The Containership Company will last long enough to upset the established order on the Pacific route, which is rapidly assuming the guise of a dictatorship.
For a start, the Transpacific Stabilization Agreement (TSA) shows no sign of remorse or embarrassment at jacking up rates and is now legally allowed to discuss slow steaming. Its implied assertion that reduced speeds will mean customers benefiting from lower fuel surcharges has persuaded Federal Maritime Chairman Richard Lidinsky to endorse the extra role.
Cynics are already jeering, claiming that there is no sign of a new bunker fuel formula or of any details on how customers and shippers will benefit. If nothing transpires within the next three to six months, industry lobbies will be writing strong letters to Lidinsky, demanding that the new provision be yanked.
But an even more dictatorial trend has emerged. Shipping lines from China are said to be abandoning consignments on the docks if contract customers refuse to pay higher rates. More specifically, to avoid outrage from lines that are innocent of the charge, some lines that ship from China and have a large China shareholding are said to be indulging in this practice, which is little short of demanding a ransom.
The tales of woe are seeping through, with the exact circumstances still to be made clear. (Google's travails show just how hard it is to get the facts). But it is happening – while non-contract customers are being quoted spot rates that bear no relation to market economics.
This is where The Containership Company hopes to make inroads. Its dock-to-dock service gives a genuine, holdfast lower-than-market rate that should guarantee business.
There are no prizes for guessing that the model is being copied from airlines, with low charter rates being obtained on idle vessels, although there is some surprise in the industry that no-one has had the courage and initiative to put the idea into practice earlier.
Considerable international goodwill will accompany the first shipment, due at Los Angeles on May 3.
And, while I may be wrong, it does not appear that the line has declared its policy on slow steaming.
A yardstick of the line's "no frills" integrity and determination to be independent, will be shown by steering clear of the TSA. If the service proves a resounding success, steamship interests will be suggesting that TCC joins the TSA.
If that happens, Richard Lidinsky will be receiving a few more strongly worded letters. 

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