Falling freight rates
I refer to Simon Pritchard's 'Focus on Economics' column headlined 'Competition would make waves in shipping trade' (South China Morning Post, July 4).
Informed press sources have recently forecast that the transpacific services operated by the major container shipping lines are alone expected to lose in aggregate some US$2 billion this year.
Export freight rates on these services have fallen by between 30 and 40 per cent over the past two years. This is hardly evidence of Mr Pritchard's so-called cartel in action. In relation to the 'conference system' Mr Pritchard ignores such forecasts and says: 'The losers, of course, are the rest of the SAR's export-linked manufacturing and service firms which see much of their profit margin sucked up by shipping lines and terminal gate-keepers'.
By his own admission, Mr Pritchard concedes that it is not all of their profit margin.
I leave readers to form their own views as to who are the real winners and real losers here.
N. D. SIMS
Director and Chief Financial Officer
Orient Overseas (International) Limited