Subscribe to our free, weekly email newsletter!

The New World Alliance to reduce number of transpacific vessels soon

Spokesmen for TNWA – comprising APL, Hyundai Merchant Marine and Mitsui OSK Lines – noted that factory shutdowns during the holiday warrant the temporary carrier reduction.
By Patrick Burnson, Executive Editor
January 18, 2011

Coinciding with the Lunar New Year celebrated in Asia next month, several major ocean carriers will be withdrawing capacity on the Transpacific.

Spokesmen for The New World Alliance (TNWA) – comprising APL, Hyundai Merchant Marine and Mitsui OSK Lines – noted that factory shutdowns during the holiday warrant the temporary carrier reduction.

The announcement comes at a time when industry analysts are concerned about too much existing capacity in all trade lanes.

Drewry Shipping Consultants, Inc. in London believes that the industry has emerged from the global recession with both carrier profitability and demand figures recovering. But analysts there beg the question: have the carriers learned from their experience?

The fact that no major companies “went to the wall” still seems to have insulated the industry from the despair of 2009 and there is now the feeling that perhaps the dark days did not happen,” said Neil Dekker, editor of the Drewry Container Forecaster.

In essence, Drewry observes that it is back to normal operating conditions.

“Perhaps the biggest carriers are happiest with no long-term profitability as long as they have market share. However, the utopia of freight rate stability sought by shippers seems a long way off if carriers abandon their short-lived prudence and profitability,” said Dekker.

Dekker cautions that, “Just before the crucial contract re-negotiation period, carriers are passing any aces to their customers once again, but shippers maintain that they do not necessarily just want low rates – they also want a sufficiently reliable service. The Federal Maritime Commission is also suggesting that both parties talk to each other more, but unfortunately, it seems that some carriers are not necessarily heeding this message. However, it is also time for shippers to bring more detail and information to the negotiating table and anecdotally we hear that this process is starting to happen.”

Donald Pisano, the newly-appointed chair of the Ocean Transport Committee for National Industrial Transportation League, said his organization will also be monitoring the situation closely.

“We would like to see continued momentum in freight policy reforms ensuring adequate vessel and equipment capacity to meet the transportation needs of our members,” he told LM.


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 .(JavaScript must be enabled to view this email address).

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!

Recent Entries

Seasonally-adjusted (SA) for-hire truck tonnage in October at 135.7 (2000=100) was up 1.9 percent compared to September’s 133.1, and the ATA’s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment was 139.8 in October, which was 0.9 percent ahead of September.

The average price per gallon of diesel gasoline fell 3.7 cents to $2.445 per gallon, according to data issued today by the Department of Energy’s Energy Information Administration (EIA). This marks the lowest weekly price for diesel since June 1, 2009, when it was at $2.352 per gallon.

In its report, entitled “Grey is the new Black,” JLL takes a close look at supply chain-related trends that can influence retailers’ approaches to Black Friday.

This year, it's all about the digital supply network. In this virtual conference, we will define the challenges currently facing supply chain organizations and offer solutions designed to transform linear operations into dynamic, automated networks that offer seamless communication, visibility, and the ability to respond and optimize processes at any given time.

In his opening comments assessing the economy at last week’s RailTrends conference hosted by Progressive Railroading magazine and independent railroad analyst Tony Hatch, FTR Senior analyst Larry Gross said the economy continues to slog ahead at a relatively tepid pace, coupled with some volatility in terms of overall GDP growth. And amid that slogging, Gross said there is currently an economic hand-off occurring between the industrial sector and the consumer sector.


Post a comment
Commenting is not available in this channel entry.

© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA