ANERA CARRIERS EXPAND DISCOUNTS MARKET SHARE UNDER PRESSURE

ANERA CARRIERS EXPAND DISCOUNTS MARKET SHARE UNDER PRESSURE

Ocean carriers that collectively set rates on most traffic from Asia are expanding the discounts on cargo tendered during the traditionally slow fall months.

In early August, the 10 carriers of the Asia-North America Eastbound Rate Agreement, or Anera, offered many large importers a $60 discount on every container shipped from Dec. 1 through April 30.Later, the Anera carriers voted to let the discounts take effect in September on footwear and toys, two of the top 10 container containerized imports from Asia, and to increase the discount to $100.

In a meeting last week, the carriers decided to extend the discount beginning in September to most of the remaining cargo moving east across the Pacific.

The decision means that the Anera carriers will be giving up a portion of the rate increase of $200 to $250 per container they secured in annual contract negotiations with shippers this year.

The move underscores the tremendous pressure the conference carriers are under to preserve market share in a trade where nonconference carriers offering lower rates are providing competitive service. The program will now apply not only to slack-season cargo but the latter part of the holiday shipping season as well.

Indeed, market inroads by nonconference carriers were behind Anera's dramatic move to expand the discounts, executives said. There have been ''significant gains in market share by carriers outside of the TSA (Transpacific Stabilization Agreement), Cosco (China Ocean Shipping Co.) in particular," said Brian Conrad, managing director of Anera.

"The (Anera) carriers are still under some market pressure in terms of volume and utilization, and anticipate pressure coming into the slack season," he said.

The TSA is a forum of conference and major nonconference lines for

discussing rates and capacity.

Carrier officials said efforts to head off further inroads by nonconference carriers in the shipping market for toys and footwear was also behind the decision to expand the slack-season discounts.

Three of the largest toy importers - Hasbro, Mattel and Toys "R" Us - are now shipping all or part of their volumes with non-Anera carriers. Almost all the growth in footwear imports since 1993 has been captured by nonconference carriers, according to the Port Import/Export Reporting Service (PIERS) of The Journal of Commerce.

Officials said Anera is facing a situation in which importers are beginning to reach the minimum volumes they committed to nonconference carriers under contracts signed last spring. After reaching their minimums, shippers are free to ship their cargo with any carrier, conference or nonconference.

Anera, having lost cargo to the independents in the spring because of what many regarded as its insistence on securing rate increases, is now trying to attract some of that free cargo back onto its members' vessels through its discounts.

Whether it succeeds will depend to some degree on how the independent lines respond.

"You have to take it case by case," said Ken Kolbe, regional general manager for Hyundai Merchant Marine, an independent carrier.

"With some of the contracts, there is no impact on us. With others, there may be a situation where cargo is shipped back from an independent to a conference line. We would have to sit down with the individual account to see what we need to do" to maintain the business, he said.

"Some customers are eyeing it skeptically. In some cases even a $100 discount will not woo cargo back to the conference," he said.

"We are going to be looking at our non-Anera carriers to see what they will do for us to fight off Anera," said Mike Donahue, manager of corporate transportation for Converse Inc. in North Reading, Mass. "They might not do anything because they are loaded" full, he said.