INDUSTRY BAFFLED BY ANTI-CONFERENCE REPORT
Shipping industry officials are baffled by an unofficial report prepared by a research unit of the World Bank claiming that the elimination of price setting under conferences would cause prices to drop 25 percent and produce an additional cost saving of up to $2 billion in the U.S. foreign trades.
World Shipping Council president Christopher Koch is planning to meet with authors of the report to determine how they arrived at their conclusions.
Although the report was performed by the Development Research Group, a World Bank unit, the World Bank said the views in the report “are those of the authors and should not be attributed to the World Bank.”
In 1999, revenues of all carriers in the transpacific and transatlantic trades combined came to $19.2 billion. A 25-percent rate reduction would mean a $4.8-billion drop in revenues. Carrier profits for the same period in the two major trades came to $543 million.
If such losses were to occur, “services would deteriorate and chaos would result,” Koch said.