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Schaefer: Zim exploits monopoly power to raise freight rates

Schaefer noted that due to the powerful position Zim will have and due to lack of competition the quality of service would be harmed. Zim: increase is due to increasing operating costs
27.08.07 / 00:00
Schaefer: Zim exploits monopoly power to raise freight rates
27.08.07
Schaefer: Zim exploits monopoly power to raise freight rates

Schaefer noted that due to the powerful position Zim will have and due to lack of competition the quality of service would be harmed. Zim: increase is due to increasing operating costs
 
Mr. Gad Schaefer, the Israel Shippers' Council chairman attacked last week the decision made by Zim to increase the level of export freight rates from Israel to the USA, arguing the increase will have an adverse effect on Israeli exports to the USA
 
Zim had announced an increase of US$150 per TEU and US$200 per FEU which will apply on containers moving to the East Coast and Canada.
 
Zim had also announced an increase in freight of US$200 per TEU and US$300 per FEU for containers going to the West Coast.
 
In a letter Schaefer wrote to the Minister of Transport and the Minister of Industry & Trade he noted that the increase would harm exports to the North American market.
 
Schaefer also noted that the abandonment of Israel’s ports by leading international shipping companies was worrying and necessitated improvement in the service at the ports and investment in the construction of more piers.
 
Schaefer pointed out the announcement that had been made by A.P. Moller-Maersk Group that it planned to suspend its direct shipping service to the US from Haifa Port in October.
 
Schaefer noted that due to the powerful position Zim will have and due to lack of competition the quality of service which is a highly important component in the export trade would be harmed.
 
He mentioned Maersk’s announcement of its departure from Israel had left Zim Integrated Shipping Services Ltd. as the only leading carrier offering direct service between Israel and the US ports.
 
A spokesman for Zim reiterated the company's long time position arguing that Zim does not enjoy any monopoly power. "All global operators offer maritime services to the USA via transshipment ports, however, Zim is preferred by the exporters due to its better service quality and loyalty to the Israeli economy at all times and under any circumstances"', Zim's spokesman said.
 
Zim added that the increase in freight rates was made necessary due to increase in operating costs.

 

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