An examination of the factors contributing to the recession of the container shipping market.
Written in 2003; 3,392 words; 11 sources; APA; $ 96.95
Paper Summary:
This paper discusses the various factors that contribute to the recessed current condition of the liner market. The paper focuses on factors such as the over capacity and oversupply of tonnage, the global economic turmoil, the increased competition, the technological improvements, the increased operators logistical responsibilities, the inability of the conferences to stabilize the freight rates and play a price setting role as well as how the operator's difficulty to fill up the space of large container vessels force the liner operators to negotiate higher freight rates.
Table of Contents:
Introduction
The Freight Market
The Fleet
Liner Operators Additional Responsibilities
Conferences and their Function in the Liner Market
Intensification of Competition
Impacts of Operators' Consolidation
Supply and Demand; will Freight-Rates Fluctuate more?
Why do Liner Operators and Shippers have to Debate?
Conclusion
From the Paper:
"In the current market environment, shippers remain concerned about the viability of ocean carriers, specifically their ability to maintain adequate service levels to handle containerised export and import needs. Virtually all shippers believe that carrier revenue increases would be acceptable to assure continued viability of service. The obvious revenue enhancement mechanism available to carriers is collective initiatives through talking agreements benefiting from statutory antitrust immunity such as the West Coast Transpacific Stabilization Agreement (WTSA), subject to agreements filed at the Federal Maritime Commission (FMC). However, even with the antitrust immunity which allows carriers to collectively discuss means of increasing revenues, the market conditions ultimately still control the fate of any joint carrier initiative. The result is that recently several efforts have been announced but then withdrawn in the major trade lanes--the transatlantic and transpacific. An alternative to carriers' collective rate discussions and increases is collective capacity control and reduction. Reduced capacity translates into higher rates if the carriers adhere to the arrangement set by membership in a talking agreement. Shippers vigorously opposed capacity management because it does not reflect market forces."
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