Oh, wait a minute. That wasn't 30 years ago. That was yesterday.

We're told that change is the only constant, yet I wonder whether an exception can be made for the maritime industry. At the Journal of Commerce's annual Trans-Pacific Maritime Conference in Long Beach last week, ocean carrier representatives took the podium to argue the case for ... higher freight rates.

"It will be tough for liners to survive if they are continuously confronted with low rates and high cost," said keynote speaker Wei Jiafu, chairman of the board of the China Ocean Shipping (Group) Co.. He noted that rising fuel prices, port expenses and other fixed costs are squeezing operators' margins. And he argued that competition among carriers should be based on service, not rock-bottom rates.

We haven't heard that before, have we?

I don't mean to fault Capt. Wei personally. He was only voicing a plea that's been heard from every liner executive in the trades. Brian Conrad, executive administrator of the Transpacific Stabilization Agreement, said carriers are facing a critical shortage of capital, along with a dire need "to improve their revenue base." (Germany's Commerzbank and the Lloyds Banking Group are among the private lending institutions who are said to be curtailing loans for the building of new containerships.) Without meaningful revenue recovery this year, Conrad said, many shipowners could be at risk.

Sounds like a heartfelt cry for help. But it wasn't so long ago that ocean carriers were posting record profits. Now they're back deeply in the red, losing a combined $5bn in 2011. What happened?

There was no lack of economists at TPM to explain the situation. Volumes in the eastbound trans-Pacific trade were up by just 1 percent last year, said Mario Moreno, economist with the Journal of Commerce/PIERS. And trade activity was still just 92 percent of 2007's level, prior to the Great Recession.

The culprits included global supply disruptions such as the Japanese earthquake and tsunami, volatile oil prices, sluggish consumer demand and stubbornly high unemployment. Yet another factor was the rising cost of goods from China, the source of more than 47 percent of U.S. imports in the trade. Triggered by higher labor rates, a stronger yuan and more expensive raw materials, import prices from China were up by an average of 3 percent in 2011, Moreno said.

Don't assume from those facts, however, that ocean carriers were entirely helpless victims of economic misery. As noted by Martin Dixon, research manager with the Container Freight Rate Insight service of Drewry Shipping Consultants, there were two key drivers influencing freight rates last year - "the balance of supply and demand, and the way carriers behave in the marketplace."

The first factor is a chronic problem for the industry. Supply and demand are never in a state of complete equilibrium, given the amount of time it takes to plan for and build new ships. And rising economic uncertainty has only made the task of gauging customer demand more difficult.

Carrier behavior in short-term ratemaking is another matter. Lines speak eloquently about the need for compensatory rates (see above), then follow up with rampant discounting - often unsolicited by the shipper -- in a bid to grab or retain market share. They pull ships from the marketplace to firm up rates, only to bring them back the moment the trade stabilizes. And, of course, they build ever-larger container vessels, adding thousands of slots that have to be filled.

The result is billions of dollars in red ink. Maersk Line alone lost $602m in 2011, after posting $2.6bn in profits the year before. Now it's struggling to reverse the trend. Along with other carriers in the trade, Maersk is counting on general rate increases of $775 per 20-foot equivalent unit (TEU) from Asia to Europe, and up to $800 per 40-foot container (FEU) from Asia to the U.S. West Coast. (The latter action follows a January 1 GRI by TSA carriers of $400 per FEU.) Nevertheless, Maersk chief executive officer Soren Skou recently vowed that the carrier will hold on to its recent gains in market share "at all cost. We will do what it takes," he said. Translation: great deals for shippers lie ahead.

That's not the way that carriers need to go, if they want to stay afloat financially. Coming off a spate of new vessel orders, they were "burning piles of cash in the fourth quarter" of last year, said Janet Lewis, Asian regional head of industrials and shipping research with Macquarie Capital Securities Ltd. "That cannot continue."

Carrier executives would seem to agree - even major shippers say they would be open to higher freight rates, if the result were more reliable service - but their actions don't always match their words. For all their protests about non-compensatory rates, carriers continue to place cash flow and market share above profitability. Long-time industry observers are left with a feeling of numbing familiarity.

Next: The mania for bigger ships.

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Keywords: Ocean Transportation, Logistics, Global Logistics, Transportation & Distribution, High-Tech/Electronics, CPG, Food and Beverage, SC Finance & Revenue Mgmt., Global Supply Chain Management, Ocean Freight Rates, Container Trades, Containerships, Ocean Carrier Losses, Maersk Line, China Ocean Shipping Co., Transpacific Stabilization Agreement, Trans-Pacific Maritime Conference