The former head of the US operations of liner outfit United Arab Shipping Company (UASC) urged authorities to take measures against current alliance set-ups.
Namely, Anil Vitarana, who worked for UASC as president of North American operations through to 2015, pointed out that the average spot rate for a feu going from China to the US west coast increased by 780% over the past 26 months.
If the alliances changed the competitive landscape, withdrawing regulatory approval could equally change the equilibrium
Mr. Vitarana also noted the $190bn profits liners are believed to have made last year, according to Drewry estimates.
As he said, “the extraordinary turnaround in fortunes was down to liner consolidation and the overarching power of the three global container alliances.”
Carrier consolidation and the regulatory approval granted to the major carriers to group themselves into 3 alliances completely changed the competitive landscape that allowed prudent capacity management
As a result, he called his clients – mainly smaller importers – to bring their plight to the attention of the secretary of transportation, the Federal Maritime Commission and their local representative in the senate and the house of representatives.
Vitarana also suggested a two-year period of notice to enable carriers to use their profits to augment capacity and launch individual services, bringing back more competition.