Does the shipping industry need conferences?

As shippers and shipping lines debated the terms and conditions of a post-shipping conference Europe, The Container Shipping Manager advised both sides to seriously consider how the new system would look. We also questioned the importance of these mechanisms and whether Europe and the rest of the world really needed them.

The revealing information below is the result of a study we conducted back in September 2006...

The European Shippers Council (ESC) has long wished to see the end of the conference system. But their efforts may very well be an example of the old maxim: be careful what you wish for.

Shipping lines could stand to benefit from a non-conference system, according to our study of the peaks and troughs in freight rates for the eastbound Transpacific and westbound Asia to Europe trade lanes.

Assuming carriers on the European trade lane adopt a service contract dominated system similar to their transpacific cousins, they could find themselves in a better position. Shippers may cop the short end of the stick. These US contracts include conditions like Minimum Quantity Commitments (MQCs) and liquidated damages if the shipper fails to honour the terms of their contract. In fact, the non-conference system could limit the degree of flexibility shippers enjoy under the conference system.

Carriers may be the beneficiaries of the non-conference system.

Source: Container Shipping Manager, the publisher HKSG Group Media is one of the world's largest providers of shipping information.