Maersk Sealand quits Pacific shipping cartel

An association that recommends what Pacific maritime shippers should charge has lost a member -- the single largest cargo shipping line in the world...

Maersk Sealand said Tuesday that in one month it will resign from the Transpacific Stabilization Agreement, which recommends tran-Pacific cargo rates. Even without Maersk Sealand, the Transpacific Stabilization Agreement represents more than a dozen lines that haul more than two thirds of container traffic from the Asia-Pacific region to the United States. But Maersk Sealand alone hauls 9 percent of container traffic by sea in Northeast Asia, the Journal of Commerce reported.

Pacific maritime cargo rates were once set by an organization called the Asia North America Eastbound Rate Agreement that had antitrust immunity. In 1998, U.S. law was changed to allow lines to privately negotiate their own contracts with shippers. The Asia North America Eastbound Rate Agreement gave way to the Transpacific Stabilization Agreement, which is similar but has only advisory responsibilities. It can't impose rates on anyone. Instead, it seeks consensus.

Maersk Sealand said it has decided that it cannot respond quickly enough to customer needs as a member of an association that takes months to reach consensus on rates and changes its recommendations only once a year.

Maersk is a Danish shipping line. Sealand, formed a generation ago by the Chesapeake & Ohio Railway, was the pioneer of container shipping, in which huge boxes filled with cargo can be hoisted off ships and onto railroad flatcars or flatbed truck trailers. As C&O merged with other railroads and grew to become CSX Transportation, it focused less on international markets and finally sold Sealand to Maersk, retaining only its U.S. maritime operations, which became CSX Lines. That company, one of two major maritime shipping lines serving Hawaii, was sold to Seattle interests a few months ago and changed its name to Horizon Lines.

Source: Pacific Business News (Honolulu).