By: Gary Ferrulli

Gary Ferrulli — Tue, 30 May 2017 15:21:49 +0000

The depiction of the rate levels is accurate, but the comment that the rates are lower than the carriers would like is a huge understatement..
The facts are that with the consistent low rates for 6 years we, had the tumultuous 2016 with mergers, acquisitions and a failure of one
line. Shippers complained about services years ago; slow steaming, increased transit times, increasing inventories. Now it is going from
4 Alliances to 3, fewer options, some changes in port calls, less frequency, fewer direct calls. Logically, what can they expect? An industry that
has lost money 6 years in a row totaling in the Billions of dollars, the shippers are getting what they pay for – mediocre to poor services and
fewer carriers to deal with.
Is that the world they want to be in constantly? If the objective is constant low rates they will wind up with very few carriers and choices and services
will not improve without increased rates and a return to profitability for the industry. Until then, a few gains here and there by efficient carriers but
with little or no consideration of the shippers – the shippers have none for the carriers, They want constant low rates AND vastly improved services. Ain’t
going to happen.

By: Gary Ferrulli

Gary Ferrulli — Fri, 26 May 2017 15:10:57 +0000

Jared, the carriers are doing their typical “raise rates today, lower them tomorrow and the next day and the next.” The spot market rates
TPEB are higher than a year ago, but they could be higher. They aren’t for two reasons; carriers continue to chase market share instead
of profitability, despite what Mr. Saade says. On supply/demand they can easily control that but won’t. Recall the end of 2009 and into 2010
when the industry anchored over 600 vessels and the industry went from loosing $21. Billion in 2009 to making $8. Billion in’2010. And of
course they have never repeated that and lost money six straight years.. So for the most part, freight rate levels are a series of self’
inflicted wounds by carriers actively supported by BCO’s who have objectives of lowering costs annually.

Comments on: What’s Happening With International Shipping Freight Rates?

By: Gary Ferrulli

By: Gary Ferrulli