A sharp drop in freight shipped across the Pacific during the past two months suggests the shipping-industry slump is about to get worse, the Wall Street Journal reports.
At the major ports of Los Angeles and Long Beach, Calif., which bring in nearly two-thirds of West Coast containerized goods, import volume fell 8.8% in both January and February compared with a year earlier, as the weakening economy, tough housing market and high gasoline prices eroded U.S. demand.
In response to slowing traffic, three of the largest global carriers -- Danish shipping-giant A.P. Moller-Maersk AS's Maersk Line, French carrier CMA CGM Group and Swiss company Mediterranean Shipping Co. -- are sharing space on the same ships instead of operating their own weekly trans-Pacific shipping services, in hopes of slashing transportation costs by as much as 30%.
"These people are trying to compensate for the lack of growth by getting some of the economies into the system by moving traffic in a cheaper way," says Mark Page, director for liner shipping at Drewry Shipping Consultants Ltd., a London maritime-advisory firm.
The ocean-freight slowdown bodes ill for railroads, delivery companies and others that bring imported goods to U.S. businesses and consumers in the coming weeks and months.
For reprint and licensing requests for this article, CLICK HERE.
Stories You May Also Be Interested In
- Shipping Lines Push Rate Hikes
- Long Beach Handling More Cargo
- ANTITRUST Local Import/Export Firms Object to Shipping Cartel
- Maersk Move Increases Cargo Edge for Los Angeles Port
- Big Order to Fill
- South Gate Distributor Taking Advantage of Boom at the Ports
- L.A. Ports Drawing Shippers, West Coast Competition Slips
- Alliances Slow On Scheduling