Despite trans-Pacific carriers unlikely to experience an excess of capacity for the next three to four years, cargo rates will go up in 2010 according to Ron Widdows, CEO and group president of Singapore-based NOL.
Widdows' comments came in a speech to a transportation conference in Irvine, Calif. sponsored by the Intermodal Association of North America, the National Industrial Transportation League and the Transportation Intermediaries Association.
Although carriers are attempting to draw down capacity as quickly as possible by cutting and combing services, said Widdows, the vast number of vessels on order could prevent a capacity balance until 2012 or 2013.
In the short term, however, rates will have to go up, Widdows told the attendees. He said that estimates suggest that carriers will lose up to $20 billion in 2009 and if rates do not increase soon and dramatically, some carriers could go out of business.