European shippers are worried they will see rates rise because of a lack of competition caused by Mediterranean Shipping Co. and CMA CGM joining forces on key routes, Journal of Commerce reports. "Shippers will quite naturally worry about the possible dominance of the new liner shipping pact, making the second and third largest carriers in the trades the biggest,” said Jean-Louis Cambon, chairman of the Maritime Transport Council at the European Shippers' Council.
“With competition based on market share alone, shippers are now being confronted by two mega-carriers on some of the most important trade lanes in the world today. That has to be a worry for shippers looking for service and price differentiation,” Cambon said.
At the same time, Cambon said the combination of services on key routes demonstrates two things: “The lack of volumes in the market as a consequence of the economic crisis and the difficulties of managing to utilize the vessels they operate; and secondly, that in order to compete for supremacy head-on with Maersk Line they need to join forces.”
The combination of services announced by the two family-owned carriers is widely seen as their response to the Daily Maersk service, which the Danish carrier introduced on the Asia-Europe trade in October.
Cambon said that while the action by the two carriers is of an operational nature, “vigilance is required to ensure that the arrangement remains an operational cooperation and does not restrain capacity beyond what would be justifiable during a slack season."
“With competition based on market share alone, shippers are now being confronted by two mega-carriers on some of the most important trade lanes in the world today. That has to be a worry for shippers looking for service and price differentiation,” Cambon said.
At the same time, Cambon said the combination of services on key routes demonstrates two things: “The lack of volumes in the market as a consequence of the economic crisis and the difficulties of managing to utilize the vessels they operate; and secondly, that in order to compete for supremacy head-on with Maersk Line they need to join forces.”
The combination of services announced by the two family-owned carriers is widely seen as their response to the Daily Maersk service, which the Danish carrier introduced on the Asia-Europe trade in October.
Cambon said that while the action by the two carriers is of an operational nature, “vigilance is required to ensure that the arrangement remains an operational cooperation and does not restrain capacity beyond what would be justifiable during a slack season."