Shippers and the supernatural

AgTC will provide unique market intelligence at next annual meeting in San Francisco this June

By ·

In the long ago late night television era, Johnny Carson had a memorable fortune teller routine. As “Carnack the Magnificent,” this classic comedic genius would predict the answers to questions that were concealed inside a sealed envelope about unexpected and monumental changes in government, commerce, and society.

In the shipping industry, we have our own “Carnack” in Peter Friedmann, the affable and capable leader of the Agriculture Transportation Coalition (AgTC). He won’t be donning a turban for his chrystal ball prognostications at the annual meeting this June in San Francisco, but a certain amount of levity may be needed when addressing the issues that keep shippers up past their bedtime.

Friedmann has already told his constituents that new contract talks between the International Longshore and Warehouse Union the Pacific Maritime Association will be stalled beyond the June 30th deadline, thereby requiring an extension.

“We can learn from the recent past,” says Friedmann.  “Over the past 12 months, ALL container terminals on the West Coast have been shutdown by ILWU for varying lengths of time (from a few hours in Tacoma to 5 days in LA/Long Beach), and this was without any contract expiration in sight.”

He adds that the ILWU locals – to varying degrees – have demonstrated their eagerness to stage wildcat strikes.

“So we should not be surprised to see disruption and slow downs at all the U.S. west coast marine terminals,” he says.

Shippers will also learn more about the projected impact of the P3 Alliance, comprising Maersk, MSC and CMA-CGM. This consortium – recently sanctioned by The Federal Maritime Commission – will control nearly 40%  transpacific cargo.

According to Friedmann, the cultural dissonance may further complicate matters as “schedule discipline” is not part of every carrier’s makeup.  He points out that the three carriers currently each maintain their own sales, documentation, customer service networks.

“But it is logical to ask whether some of these services will be combined, once the operations consolidation is fully implemented,” he says. “We do expect that there will be fewer but larger ships, resulting in reduced frequency of port calls, although with the same or even greater total vessel and equipment capacity. We are going to be monitoring this closely.”

Meanwhile, six ocean carriers are forming the G6 alliance, which has raised fewer concerns because they are already operating in vessel sharing mode in the transpacific, without detrimental impact to shipper interest.

Vessel operators will be paying close attention at the AgTC meeting too, as it features the annual “Ocean Carrier Performance Survey.” Here, Ag shippers measure companies in eleven categories of service. This includes the coveted “best vessel schedules and transit days” ranking.

Finally, a highly anticipated presentation on ocean cargo rates will be provided by Brian Conrad, executive administrator of the Transpacific Stabilization Agreement (TSA).

Conrad has compared the recent imposition of general rate increases in the trade lane to decisions by governments worldwide to defer needed infrastructure investment.

“We are in effect negotiating the annual operating budget for a major piece of global transportation infrastructure that happens to be privately financed,” he argues. “Competitive pressures to match the lowest short-term rate levels and lock them into 12-month service contracts across the board amounts to a significant deferred investment in the trade.”

Conrad maintains that TSA carriers will eventually have to stop pricing based solely on supply-demand and pay more attention to long-term service reliability and flexibility.
If this fails to develop, Conrad’s own chrystal ball shows more “acute” problems surfacing, at significant cost to Ag shippers. 


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Latest Whitepaper
B2B Sellers Prefer a Unified Approach for Ecommerce
A new study from Forrester Consulting, commissioned by NetSuite, found that many midmarket, B2B sellers say their ecommerce solutions have contributed to their growth in sales, new customer acquisitions and improved customer relationships.
Download Today!
From the August 2016 Issue
A growing number of low-cost lift trucks offer new avenues for pairing equipment and applications, but less cautious buyers might find that small up-front costs come at a steep price. Selecting the proper lift truck, lift truck tips 2016, Choosing the right Lift Truck
Megatrends in ocean freight
Ocean Cargo Roundtable: What’s in store for 2017?
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Getting the most out of your 3PL relationship
Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk.
Register Today!
EDITORS' PICKS
2016 Quest for Quality: Winners Take the Spotlight
Which carriers, third-party logistics providers and U.S. ports have crossed the service-excellence...
Regional ports concentrate on growth and connectivity
With the Panama Canal expansion complete, ocean cargo gateways in the Caribbean are investing to...

Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....
Top 25 ports: West Coast continues to dominate
The Panama Canal expansion is set for late June and may soon be attracting more inbound vessel calls...