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Monday, December 16, 2019

Maritime Logistics Professional

The Industry Waits for the Usual Follow-My-Leader

Posted to Martin Rushmere (by on October 7, 2010

The transpacific carriers are blase about uniform rate increases

The carriers on the trans-Pacific lane are part of a multi-legged amphibious beetle that carries containers on its back. When the biggest (but not necessarily the strongest or most efficient) leg moves, the industry waits for the rest to paddle forward in unison.
This week the biggest, Maersk, raised rates by $100/TEU (presumably for the spot market). Shortly, we can expect similar increases from other carriers followed by an increase in hostility and suspicion from traders and customers.
Congress will take note, becoming more convinced that the carriers are up to something that ends in "trust".
Lines appear to be taking little more than cosmetic action, which has mainly succeeded in getting the industry's dander up further. The westbound (export arm) of the TSA first set up an "advisory board", followed by the much more important inward division. Just who is on these boards is largely SECRET. Only one member is known, Mike Ruder, director of logistics for agricultural shipper Calcot.
Observers note that the lines claim transparency in all their dealings, but it seems that one-way glass is used for the process – allowing light into the TSA but not get out.
Which brings up the role of Ron Widdows, NOL boss and past head of the TSA. Hugely respected, he has written to Congress to declare his opposition to the antitrust bill.
At the TSA, Widdows set up the regular discussion panels with customers and others, which greatly improved the functioning of the group. More is expected of him now, as the carriers are in a withering line of Congressional ire.
A number of NVOCCs are looking to him to exert a radical shake up behind the scenes. So far, little has been forthcoming. Setting up "advisory bodies" is seen as meaningless and a case of shutting the stable door after the horse has bolted.
Widdows has been taken on by the World Shipping Council, presumably to give it firepower in the pushback against antitrust sentiment.   The council is not exactly known for being objective to trade and transportation and its view is becoming more entrenched by the week.
US traders and customers are being joined by their Asian counterparts in pushing even harder for the status quo to change. That alone should cause the complacent carriers to think harder about the problem.
Possibly they are still banking on Congress itself changing after the elections in a few weeks time. If so, their reputation will slide even further, cementing industry perceptions that they care very little about the future of the maritime sector.