Yang Ming (America)

History repeats itself, as people learn very little lesson from it. The effort that shippers, regulators and carriers undertook in 2010 to facilitate market stability is not working. Freight rates, both import and export, have been tumbling down to unsustainable level again since early 2011, when some smaller, aggressive newcomers ventured the rebounded market and big carriers acted to fill their new, oversized vessels.

The roller-coaster business moves from one cycle to the other more quickly than ever. More ships are laid up when lay-up costs are smaller than the losses carriers face when ships are in service. This process has been starting gradually from the fourth quarter of 2011 and will accelerate in 2012 if the low freight rate level remains or the effort for rate restoration does not succeed.

The legislators and government agencies have been doing their good jobs; the voices of shippers have been heard; and the humble wishes of carriers have been understood. Unfortunately, the efforts from three sectors are totally overwhelmed by the iron rule of demand and supply.

The unprecedented event of “at risk” refrigerated containers from Vietnam will also affect the market and the industry in 2012. Around 25 to 30 percent of the refrigerated containers have been withdrawn from this market. The slow turnaround due to lack of suitable operating protocol between organized labor, the carriers and the terminal operators will make the reefer market situation worse. All of this will take a toll on the most valuable part of U.S. export — refrigerated cargo — before the operations of refrigerated containers can come back to normal.

The chassis issue has become more mature after one more year of communication among shippers, carriers and third-party providers. The coming year may see a more smooth implementation to the benefit of all parties concerned.

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