If the big container lines that have cut rates to the unprofitable bone on the Asia-Europe trade start lowering their rates on the trans-Pacific this season, the other lines are sure to follow, Ron Widdows, chairman and CEO of Neptune Orient Lines, warned. On the eve of The Journal of Commerce’s 9th Annual Trans-Pacific Maritime Conference in Los Angeles, Widdows said shippers are asking for low rates regardless of service quality.
If carriers accede to the shippers’ requests at the opening of this year's contract negotiations, the state of the trans-Pacific trade could become as bad as that in the Asia-to-Europe trade, where spot rates have dropped as low as zero.
Widdows said several major carriers have been slashing rates on the Asia-Europe trade in order to gain market share.
He warned that the world economy is undergoing “a fundamental change” during the current global crisis and won’t emerge from the crisis for some time. As a result, he said, several container lines are likely to go out of business. |
Journal of Commerce
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