A couple of weeks ago, Far East newspapers were trying to anticipate which tack the international carriers would likely take in their repeated and futile efforts to stay in the black during this never-ending economic erosion.

Would they consolidate in the next few years, as some maritime consultants were surmising? Because A.P. Moeller Maersk and other major carriers are now taking delivery of the giant vessels they ordered during their recent spending spree – thanks to the poor advice they received from those same consultants – the brain trust in the maritime industry are now being told that pressure will force smaller carriers into the arms of the big boys.

That kind of thinking ranks with their conviction that “bigger-is-better”, but smaller firms see things differently. The move by the majors to flood the market with leviathans sparked the rate wars which pushed most carriers into the red in what has become the industry’s worst downturn.

In spite of lost revenues, Maersk’s Asia Pacific Region CEO still holds to the belief that the largest shipping companies will continue to expand the “scale of economies” in the industry, “and as we drive these ‘scales of economy’,” he stated, “it will be difficult for the smaller carriers to compete. That will drive consolidation.” He’s dreaming.

And he’s also begging the question. Randy Chen, the special assistant to the president of Taiwan-based Wan Hai Lines, decries such exaggeration. “Bigger is better if you can fill the ship,” he countered. “If your ships are not full, you need to put the vessels away for a period of time to make sure the revenue covers the cost.” And that’s exactly what the majors had to do, of course.

Think about this. If the majors are laying up superfluous capacity, do those brilliant maritime consultants actually think that those embarrassed CEOs would take on the added capacity and accumulated debts of smaller carriers if those mergers are effected? They need more headaches?
And still another thing. After designing and ordering those high-speed and souped-up giants, the subsequent and unanticipated world-wide economic turndown – the result of the diminishing demand of the world’s unemployed – then forced the rambunctious majors to figure out a way to avoid scrapping and laying up all this unnecessary capacity. So that’s when they came up with the “slow-speeding” brainstorm. The explanation for this strategy – for the gullible who’d buy the spinnage – was that slow speeding reduced fuel costs. And we’re supposed to believe that they ever cared about the operating costs? – this same industry that never hesitates to pass on all excessive costs to the hapless consumer? But now the consumers are no longer demanding, and where there’s a diminishing demand, there’s a diminishing supply – and a lot of red ink. Who sold those guys on the concept that “bigger-is-better”, anyway? And why are they afraid to admit that they’re mistaken?

What a surprise they’re in for. It’s no secret that many of the smaller lines are family-owned and won’t easily be pushed out of the market. In fact, these little guys will outlive the big boys.