This is in response to an article in the JOC on 12-5-16, written by Bill Mongelluzzo and Mark Szakonyi:
There is nothing new with shippers resistance to rate hikes. To say that they aren’t convinced the fundamental drivers around pricing have changed is just sugar coating to: we don’t want to pay more. The writer of the article is somewhat correct to say that by their resistance to the rate hikes, the shippers are setting the stage for fierce negotiations, the result of which could determine which carriers stay afloat in coming years. What the shippers are forgetting, or actually chose to ignore is that by having fewer carriers to deal and negotiate with in the years to come, they are actually cutting the branch on which they are sitting, and even if they will be successful this year in rejecting the rate hikes, it is only a postponement for which they will have to pay twice as much, or may be even more next year when they will have to negotiate with fewer carriers.