Market conditions prompt container shipping line to participate in research and discussion forum.
Maersk Line has decided to apply for membership in the Trans-Pacific Stabilization Agreement (TSA) after a five year absence. With Maersk Line’s acceptance, there will be 15 members of this research and discussion forum made up of major ocean shipping lines that carry cargo between Asia and the U.S. The decision to re-join the TSA comes after the trans-Pacific trade has incurred industry loses estimated to be 3 billion USD or more.
“Five years ago, the market conditions were vastly different than they are today,” said Lars Mikael Jensen, Vice President Pacific Trade, Network and Product, Maersk Line. “Maersk Line is convinced that restoring profitability long-term is needed in the marketplace and has demonstrated market leadership in this regard. It is imperative that service levels involving vessel capacity and string frequency across the Pacific do not suffer as a result of continued rate deterioration,” he continued. “The purpose of Maersk Line’s participation in the TSA is to develop a platform that allows customers and carriers to find stability for years to come, avoiding the gross fluctuations of 2009. This business must be managed for long-term health and a return to profitable and sustainable operations.”
Many factors have impacted rates. These include decreased volumes, fuel price volatility and excess capacity. Maersk Line has taken drastic steps throughout the year and made numerous adjustments to services, routes, port calls and staff. With those changes, Maersk Line continues to serve customers with reliable, stable and dependable service in light of global economic challenges. Most trans-Pacific carriers are operating at a loss. To overcome the challenges facing the industry, it is crucial to build a cohesive relationship with shippers. The market remains extremely fragile; continued rate declines could result in far-reaching and possibly permanent implications for global trade, including fewer services.