American shippers on watch

   With the liner carriers preoccupied with changing partnerships and big ship capacities coming on line in the Asia-Europe trade, American shippers engaged in the transpacific and transatlantic trades should be spared from similar disruption, at least for now.
   Since last April, the industry has witnessed the formation of partnerships among once contested rivals, including Mediterranean Shipping Co. and CMA CGM, the Grand and New World alliances, and CKYH and Evergreen Line — mostly in an effort to combat Maersk Line’s giant standalone operation.
   However, the fact carriers are ready to join in these new and larger alliances doesn’t mean U.S. trades are immune from the effects. This trend could eventually ripple across all east-west trades, and if this doesn’t occur in any wholesale way for at least a year or two, carriers in Asia-Europe may at least feel the pressure to move some of their large box ships — by American shipper and port standards, that is — from this beleaguered trade to the transpacific.
   The bigger risk to the ocean shipping industry in terms of service, as reported by Associate Editor Eric Johnson in this issue (page 38), is that at current rate levels some carriers may run out of cash by mid-2012, unless they lay up vessels prior to the peak season. The March-May period will be worth shippers watching closely on their radars.
   Meanwhile, shippers that obtain an attractive rate offer from a carrier during their service contract negotiations will be wise to snatch it up and not wait for potential layups to happen and capacity to constrict. 
   Despite all the talk in recent years about how shipper-carrier partnerships are good for the ocean shipping industry, the price of the service takes precedence for shippers and carriers alike. For now, and perhaps for the next couple of years, large American shippers, particularly exporters in the non-Asia trade lanes, should enjoy the upper-hand in their rate negotiations with carriers. — Chris Gillis