What are the factors of decline shipping conferences?
Answers
Answer:
The European Union has long considered the liner conference system as anti-competitive and has been pushing for its end because shipping lines discuss tariff rates and operational costs. The move by Maersk Sealand is seen as another nail in the Transpacific Stabilization Agreement and it's clear that the shipping giant sees the TSA as irrelevant to its Far East operations. In fact, a company spokesperson said that the move comes because it wants to respond to customers' requirements without the long drawn out of the TSA process. The problem with shipping conferences is that its pricing schemes are too arcane and complex. The decline of shipping conferences pretty much coincided with the advent of containerization during the 1970s. Conferences are the mechanism that controls cargo capacity and creates rates based on the value of the cargo. Liner companies need rate stabilization for valuable cargoes because of the costs of ships and containers. The move by Maersk Sealand is considered to be the first step in the demise of the TSA, but the shipping giant can afford to test the waters by itself, while other operators cannot. Shipping executives have said that the Danish company has only so much capacity, and with the Pacific trade booming its exit from the TSA, it will have little effect on the Asian conference.