Imperfect Unions.

Shipping mergers take their toll on services.

MERGERS, TAKEOVERS OR WHATEVER YOU WANT TO call them are coming fast and furious in the transportation industry. Whether this will lead to "increased efficiencies" as the merger moguls put it, or to higher rates and inflexible service, as industry naysayers predict, remains to be seen. But I can tell you that the folks whose cargo is on the line here have not been jumping for joy about the mergers thus far.

The slow burn in shippers' offices is not about prices. Rates have risen, but not jumped. What's really irking shippers is eroding power. For years, the companies with the cargo called the shots. Now they're the ones being dictated to, and they don't like it. Big booze shippers like the Wine and Spirits Shipping Association are waiting in line for a ship slot.

As complaints fly and shipping lines duck for cover, keeping customers informed about who is responsible for what service has become important business. For example, U.S. shipping line Crowley Maritime sold its North-South American east coast service, called Crowley American Transport, to Germany's Hamburg-Sud a couple of years ago. The European company maintained the Crowley name, but the former U.S. parent company has been getting the shippers' gripes. How bad is it? U.S. Crowley spokesman Mark Miller says, "We put a message [on our answering system] to tell callers that when they were calling for Crowley American Transport, that they were no longer dealing with a Crowley company."

The biggest recent merger was Maersk Line's gobbling up of Sea-Land. Once again, shippers grouse about problems, especially in the European service. Industry chatter--never substantiated--even alleges some miscues were the result of bitter Sea-Land folks who sabotaged shipping contracts. A Maersk SeaLand source would say only that "these kinds of mergers take time to get all of the kinks ironed out."

Altar bound. Now we've got United Parcel Service taking over Fritz. UPS Latin American marketing director John Menna calls it a great marriage. "Fritz has some key offices throughout the region," he says. With the UPS name and the Fritz Latin American know-how, what a perfect union.

Still, the sum of two parts can make a whole lot of nada. I used Fritz to send personal items one time and it took several months to get the goods from Brazil to the United States. The duffel bag and footlocker arrived half-destroyed and water logged--and it went to the wrong destination. So much for regional know-how.

And that's the way quite a few shippers are feeling these days. The consolidations, so far, have not made it any easier to get their goods to, through or from Latin America. A Florida-based computer shipper says that one of the newly merged lines was supposed to drop his goods off in southern Brazil. The shipping line forgot--and the goods wound up back in Florida.

It's anecdotal evidence at this point but keep in mind that shipping is a cyclical business. Here's what happens: A trade market gets hot. Shipping lines or airlines flock there like moths to a flame and soon there's a glut of space on ships, planes or whatever else they're using to carry cargo. The ship and plane owners drop rates to lure more cargo. Some lines can't handle the financial pressure and either get out or go down for the count. And at some point. the market cools, the surviving lines gobble each other or look for the next trade boom. By the time trade stabilizes, there are fewer lines.

That's what's happened throughout most of Latin America lately, especially in South America. Ocean-shipped containers of U.S. exports grew by more than 70% in the mid-1990s, only to dwindle and slide over the past few years.

So, there's less cargo and, thanks to the mergers and consolidations, fewer shipping lines. And there probably will be fewer still. By the time trade picks up again, shippers' choices will be limited.

That'll cut down on phone bills, though. Let's see, that's one call apiece to The Shipping Line, The Air Cargo Carrier...