News
- Transpacific rates will fall,
- 3/3/2009
Transpacific rates will fall, laments Widdows
By Greg Knowler, Los AngelesFreight rates on the transpacific will go down "by a healthy degree", predicted NOL president and chief executive Ron Widdows at the Transpacific Maritime conference in Los Angeles today.
Shipping lines are coming under increasing pressure to slash rates and with sharp falls in import box volume into the US, carrier executives such as Widdows can only plead with customers for understanding.
"Rates are going to go down and that would be beneficial because everybody is under pressure from a cost standpoint," he said. "I understand that, but the people who serve the market have got to be able to survive in order for that to happen."
In January, inbound container throughput fell by 23 percent at the port of Long Beach and eight percent at the neighbouring Los Angeles port. An excess of capacity has seen benchmark rates from Hong Kong to Los Angeles falling 25 percent from a year ago.
In response to a question on how far the rates will fall, Widdows declined to give a figure but said they would go down by "a lot".
"Obviously we are going to do everything we can do to keep rates at a level that allows us to stay in business. That's going to be a challenge. I don't think you are going to see rates on the transpacific go to the imbecilic levels as they have on the Asia-Europe trade."
Widdows warned that if rates did plunge to Asia-Europe levels, "half the people in the business will go out of business. It's just not something that is sustainable".
"For all my customers in the room, I love you all, but you've got to leave me a little bit. I've got to be able to live."