Digital Edition

January 2 2023

Issue link:

Contents of this Issue


Page 16 of 131

Januar y 2, 2023 | Journal of Commerce 15 EXECUTIVE COMMENTARY 2023 ANNUAL REVIEW & OUTLOOK Shippers due to broader macroeconomic slowdown. Assuming this downturn of inbound freight does not occur in harmony with another major dis - ruption such as the ever-ominous and contemporary labor dispute impacting rail service, our inter - modal supply chain will experience a much-needed pause and opportu- nity to reset. ACSA's focus is facing forward on how we can be better equipped and prepared to efficiently execute, providing commercial confidence to our customers, when demand for US cotton and other com - mercial activity simultaneously increase. Strategic utility of fund- ing scheduled for investment in US infrastructure, assurance of reasonable service from ocean car- riers without categorical denials, breakthroughs in data visibility and integrity with cargo receiving windows identified as the lead- ing priority, opening markets to introduce and utilize chassis, and commercially applying sound prin- ciples of merchant haulage freight are all key tenets of our advocacy to achieve readiness and resilience moving forward European Shippers' Council Godfried Smit Secretary General Let me first say that it is always tricky to make these kinds of fore- casts. Who could have predicted the humanitarian crisis in Ukraine just one year ago or the present energy crisis? But let's give it try. Taking for granted that the economy is not cooling down much, the labor market will be a consid - erable challenge. We are facing a considerable lack of personnel in Europe — the lack of drivers is only one example, but the same applies for warehouse workers. The work- ing population as a whole is aging in the EU, but specifically in these logistical services, and liquidity provision to the broader market. Within the last year, US cotton exporters fell significantly behind our historical average, and when compared with scheduled ship - ments, we have reached a pandemic-era high, creating unprec- edented costs and commercial risks. ACSA has continuously stated that since the beginning of the pandemic, systemic supply chain inundation and challenges will remain until total inbound cargo becomes rightsized for available US infrastructure. Only in recent months have we seen outsized volume of imported cargo begin to break and proceed to break sharply American Cotton Shippers Association (ACSA) William H. Allen President and CEO Performance from US cot- ton shippers has never been so com- promised. Failure to execute threatens the competitiveness of US agriculture and certainly the fate of our members, who provide the key services of risk management, BassTech International Lori Fellmer VP of Logistics and Carrier Management A broken record is a good thing if you are Aaron Judge hitting a record- breaking 62nd home run, as he did this past October to end Roger Maris' 61-year reign as the American League's single-season home run king. But the broken record I have in mind is the type that repeats the same refrain over and over…and over again. At the risk of sounding like a broken record — or, for our colleagues of a younger generation, "damaged vinyl" — the most concern - ing supply chain challenge continues to be surety of access to competitive and reliable ocean transportation. There are various strategies that businesses pursue to increase the chances of having access to ocean transportation and to reduce the odds of leaving valuable product sitting on the warehouse floor, but the process can still be similar to rearranging the deck chairs on the Titanic. Contrib - uting to this futility is the endurance of ocean common carriers' immunity from antitrust regulations in the US and similar protections in other parts of the world. While vessel-sharing agreements and other forms of cooperation among carriers have the potential to bring benefits to the shipping public, their existence alone does not guarantee quality ocean transporta - tion or lower cost. In fact, we have seen the poorest of performance and the highest of freight costs — more broken records! — during these past years when just three alliances have controlled between 80 and 90 percent of the ocean transportation network. We have seen how, when carriers of an alli - ance agree among themselves to blank sailings or bypass a port, a seismic jolt runs through our supply chains, often with few to no options for recovery or replacement via competitive offerings in the marketplace. Following years of consolidation in the industry, when individual ocean common carriers today are themselves of a magnitude that rivals entire alliances of years past, it is worth considering that today's alliances may be too big to bring any - thing but an unhealthy oligopolistic control of this essential industry. Having said that, and despite claims by the World Shipping Council, who defend the interests of their carrier members, it is untrue that the current wide-reaching antitrust protections are legal prereq - uisites for the existence of vessel sharing alliances. The door for cooperation among ocean common car- riers needn't be shut, but the right to walk through it should be justified, earned, and subject to indepen- dent periodic review to ensure that the result is an improved ocean transportation network that brings benefit not to ocean carriers' shareholders but to businesses and industries whose trade relies on ocean transportation. We can save the Titanic from sinking if we repeal the existing antitrust immunity and see what records the ocean common carriers can then break while they compete to serve the shipping public. "The door for cooperation among ocean common carriers needn't be shut, but the right to walk through it should be justified, earned, and subject to independent periodic review." ▶ "Systemic supply chain inundation and challenges will remain until total inbound cargo becomes rightsized for available US infrastructure." William H. Allen

Articles in this issue

Links on this page

Archives of this issue

view archives of Digital Edition - January 2 2023