Container shipping lines face a "potential catastrophic event" if prices in a key trade lane are not increased, an industry organisation has warned, adding to the gloom surrounding the sector.
Brian Conrad, executive administrator of the Trans-Pacific Stabilisation Agreement, said shipping lines' financial survival now had to determine the rates they charged to move containers, rather than filling their ships or protecting their market share. The TSA, which allows shipping lines to share information about cargo volumes and planned future capacity, called for a sharp increase in the rates charged to move containers from Asia to North America, saying many at present were unsustainably low. Its 14 members had all committed by the end of June to stop offering any low short-term, spot rates for moving containers introduced in the past few months, it added. Shipping lines desperate to fill ships have cut spot rates on some routes to the lowest levels in the sector's 53-year history. On routes between Asia and Europe, some have been charging only the surcharges normally meant to cover fuel, currency changes and terminal handling costs. Between Asia and North America, overall charges have fallen to only a few hundred dollars for each standard container from more than $2,000 a year ago.
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