Rumblings of rates war
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IS A RATES war likely to break out among roll-on/roll-off ferry operators? There was a great fear of this with some "optimistic" exceptions at the Seventh International Conference and Exhibition on Marine Transport Using Ro-ro Methods which closed in Nice last weekend. JOHN DURANT reports.
Delegates — the total attendance at the exhibition and all sessions was 700 from 47 countries — were warned of roro over-capacity.
Nigel Tatham, of Sea Containers, London, chairing the opening session at the Acropolis centre in the French port and resort, said that his computer printout received that day showed that another 97 ro-ro ships are on order plus 159 container ships. "It does not augur well for freight rates," he said.
B. Hultman, of Brostroms Reden, Gothenburg, said some over capacity may be mitigated as old vessels are scrapped and that five to 10 per cent over capacity is normal. But it would be necessary for ro-ro to eat into the conventional market at lower freight rates. If a freight war comes, only the fittest will survive. "You may win a freight battle, but never a freight war," he added.
Mr Hultman urged his colleagues to "try a rates peace option with rates up 10 per cent" — the rate level is more important than the rate of utilisation, he argued. If it failed you could always revert to war, he added.
Eugenio Belloni, of Merzario, Milan, was the most pessimistic on behalf of ferry operators, believing that many of them will soon find themselves run by the banks, politicians and civil servants.
Another of the Ro-Ro Conference panelists, A. M. Briere, a French shipbroker, suggested that ro-ro cargoes may pick up in late 1985.
For hauliers as distinct from manufacturers' freight managers, ro-ro is largely a short-sea concept, but the background position is that more and more large ro-ro ships with no tractive units aboard except for export, now operate on long-sea voyages.
Barber Blue Sea has introduced ro-ro on a large scale in a "round the world" service.