Letter To The Editor

SIR, For some time now, I have been telling carriers that what is going on does not make sense and must change. They are building larger and larger ships, in pursuit of the holy grail of economics of scale, when they know in advance they will not be able to fill them.

And what do they do next? They sell the space to integrators, giving them in this way the knife that will stab them in the back.

Is this rational? They should instead build smaller ships (like Neptune Orient Line) and try to fill them intelligently, in co-operation with their alliance partners. In addition, instead of putting their money into ships and becoming asset heavy, they should rather let Germans do this and simply charter in. Their nowadays sizeable resources should go into logistics systems and infrastructure.

After all, it is the carriers themselves who claim that this is where money can be made and not in ships. They all have the expertise (and money) to go in this direction through organic growth.

The opposite is not possible: shipping is too exotic for comfort for most integrators and non-vessel operating common carriers to expand through acquisition. They could thus be left out in the cold before they know it.

Something for the box club agenda next month?

HE Haralambides
MEL-Erasmus University Rotterdam
 

Source: Lloyd's List