SHIPPERS NEED NEW ALLIANCES TO WORK — ARSENAULT

A failure of pending alliances to return the global container shipping industry to profitability could deliver a devastating future reality to the interests of shippers, according to former Hyundai Merchant Marine vice-president David Arsenault.

In a recent address to the International Propeller Club, Mr Arsenault reportedly stated that if those new alliances cannot sufficiently raise rates, then shippers “won’t like the next step”.

That next step would entail rapid consolidation through mergers and acquisitions that would leave the industry with a handful of extremely powerful shipping lines that could set freight rates at will, reports JOC.com.

Mr Arsenault said such a scenario had occurred in the global airline industry, where after many bankruptcies and mergers, the remaining carriers were now in a position to influence capacity so as to keep planes full and fares on a continual rise.

Meanwhile, JOC.com is also forecasting that United States ports will face “unprecedented” operational challenges when containerlines restructure from four down to the three new global vessel-sharing arrangements on April 1.

It predicts that the introduction of The Ocean Alliance, THE Alliance and the 2M Alliance will particularly result in “magnified” challenges for the ports of Long Beach and Los Angeles. Previous congestion issues at such ports has caused significant flow on “out of window” call impacts for New Zealand and other ports around the world.