Overcapacity may trigger market share quest and rate war

Time:2010-12-09 Browse:37 Author:RISINGSUN

INDUSTRY observers are telling shipping lines that unless they maintain discipline, and carefully match demand with supply, a rate war is likely to ensue.

In comments made at Amsterdam`s Intermodal Europe 2010 conference, Box Trade Intelligence analyst Doug Bannister, who once oversaw UK operations for Maersk, and Arthur Worsley, an FIS container derivatives broker, noted that the risk of oversupply remained palpable.


Both attributed the excess to an on-going fight to capture market share, similar to what happened in 2009.


Rates have declined over 22 weeks, as has demand, cautioned Mr Worsley, who warned that it would only take the actions of one line to send the entire market into a price war, reports London`s International Freighting Weekly.


But Maersk vice president for terminals intermodal and equipment Soren Toft remained optimistic, saying his company was obliged and willing to show leadership when it came to avoiding the mistakes of last year.