TRANSPACIFIC CARRIERS SHELVE JOINT CAPACITY PLAN

TRANSPACIFIC CARRIERS SHELVE JOINT CAPACITY PLAN

   Transpacific carriers of the Transpacific Stabilization Agreement have dropped a tentative plan to introduce a collective seasonal ship capacity withdrawal program in the overtonnaged Asia/North America trade.

   Senior executives of the Transpacific Stabilization Agreement, a group of 14 of the largest Pacific shipping lines, had considered such a plan last month.

   The carrier group confirmed that the plan has been abandoned, but would not comment on the reasons behind the move.

   Control of ship capacity is seen as a sensitive issue in the maritime industry by carriers, shippers and regulators.

   TSA had a long-running program of capacity management in the transpacific trade from 1989 to 1995 that allowed shipping lines to limit their utilized capacity both collectively and individually. The capacity limit scheme was canceled in 1995.

   TSA carriers sought to reinstate a capacity management program in 1996, but dropped the plan after facing criticism from the U.S. Federal Maritime Commission.

   The TSA's latest tentative capacity plan was believed to be different in nature from the earlier capacity utilization ceilings agreed by carriers under the former capacity management plan.

   Maersk Sealand had participated in initial discussions about the TSA seasonal capacity plan, but it recently withdrew from the talks.

   The carriers of the TSA are APL, China Ocean Shipping Co., Evergreen, Hanjin Shipping, Hapag-Lloyd, Hyundai, “K” Line, Maersk Sealand, MOL, NYK, OOCL, P&O Nedlloyd and Yangming Marine.