Just imagine what great demands they will have for the world trade! But that breathing room often comes at too high a price.2 2.For more, see Steve Saxon, “Getting more value from your fleet,” McKinsey on Finance, Number 43, Spring 2012. Carriers that embrace change will be better prepared than their rivals to make the best of the current business cycle and to thrive in the next one. Moreover, because of the worsening trade relations with China due to the fall out between India and China, the shipments took longer to process. The cargo can be transported directly from the mill to the consignee, or even directly to the consumer, to make it more efficient and to reduce the risk of damages. The vessels are getting bigger and today the biggest are plus 20 000 TEU carriers. As a result, freight rates have been growing since June 2020, accelerating in August as demand improved and reaching record levels in October despite an initial decline in spot rates at the start of the pandemic. Press enter to select and open the results on a new page. In some ports it results in conflicts and congestions and raises several operational questions. Greencarrier is an independent private company offering logistics and transport solutions. cookies, McKinsey_Website_Accessibility@mckinsey.com. Despite some recent structural improvements and less aggressive competition, there are still significant downside risks. – The acquisition of small shipping companies and large forwarding firms to take a big piece of the non-contracted market. In this webinar, Mark Newberry, a partner in the global supply chain consulting practice at Tata Consultancy Services, explains how digital technologies and cognitive analytics can help you optimize inventory performance. In our experience, companies can improve return on sales (ROS) by 1 to 2 percent within 9 to 12 months. Begin yours now. Use code SUPERPRO. Shipping lanes or “trades” provide another interesting test. A few carriers are taking these moves a step further, and tightening their relationship with terminals. So when exports match imports, there is no problem, as they have never been before now. Hidden beneath these issues (and driving them to a degree) is another set of challenges that shipping lines can readily take on. Reinvent your business. This is the only way to stay a step ahead of competition and achieve elusive profitability. Have you visited it, Have you met our Greencarrier Freight Services tea, #meetagreencarrier Making things worse, earnings have been exceptionally volatile. Open tops are used for easy loading of cargo such as logs, machinery and odd sized goods. Focus on sustainability and environment in the shipping industry. Not surprisingly, pressure to fill this capacity and capture the efficiency benefits of larger vessels has led to hasty decisions by carriers. That work falls mainly on port operators, of course, but shipping lines can make it happen through tough negotiations with competitive ports, service-line agreements that cement the deal, and guarantees of berth availability. To access our premium content, you need to upgrade your subscription to our PLUS+ status. Export licence, what is it and why do you need it? In the beginning of 2018 the global idle container fleet had 65 vessels anchored, a total capacity of 191 000 TEUs compared to 330 vessels of a total capacity of 1,36 million TEUs in 2015. Allied Market Research published a new report, titled, Shipping Container Liners Market: Global Opportunity Analysis and Industry Forecast 2020 … These containers facilitate transport of goods via both, land and sea borne modes of transport, which may involve use of ships, rails and/or trucks. I am excited to continue to follow the global trends that influence the industry and to find the best solutions for our customers in the future. The battle for customers will be determined by technology in the end. Transpacific rates have benefited from increased volumes since June 2020, driven by re-stocking, increased demand for personal protective equipment, and the growth in inventories ahead of the holiday season to cover potential disruptions. We see clear improvement potential for lines across all elements of the pricing process, from strategic pricing to transactional pricing to the systems and tools used to support the front line. “A potential decline in shipping demand, particularly on transpacific routes due to U.S.-China trade tensions and supply-chain localization, growing ecommerce that often uses air transportation, weak global economic conditions, resistance to increased contracted freight rates and slipping shipping companies’ supply discipline may put the industry under pressure.”. However, shipping is now also a kind of lagging indicator: its performance is trailing the broader, somewhat erratic global recovery. These cycles make it difficult to provide meaningful performance-based incentives to executives and staff. What challenges and possibilities do you think the future holds? There is an ongoing trend in the shipping industry to focus on sustainability and environmental issues that affect the industry and our society. Lines should understand suppliers’ costs for trucking, rail, and feeders, and use the information for advantage in negotiations. All rights reserved Privacy Policy and Cookie information. The future of the container shipping industry In the longer term, however, the government can encourage local businesses to manufacture containers. But getting their organizations to act on them is difficult. Additionally, the IMO has published the CTU code and the CTU Code Informative Material as two individual circulars. Between July and September, India’s export volume grew 24 percent; at the same time, imports reduced by 28 percent. But the big question is, what will forwarders do as a centre attack? In network design, more than a few shipping companies use outmoded approaches to design their routes; new and more powerful systems use algorithms to make better, more effective decisions about networks. The container-shipping industry has been highly unprofitable over the past five years. For example, one line spends more than $500 million per year on storage. As they take up the complex agenda outlined above, lines will also want to make changes to their organization that will give them the best chance for success. Faster turnarounds in port save time, which ships can use to steam at lower speeds at sea. Hopefully, my blog post gave you some new insights in the global container shipping industry. Between July and September, India’s … These special containers include open end, open side, open top, half-height, flat rack, refrigerated (known as "reefer"), liquid bulk (tank), and modular all built to same exterior lengths and widths as the standard dry cargo containers. 6 global trends in the container shipping industry Fredrik Hermansson, Managing Director of Greencarrier Liner Agency Sweden, makes an attempt to identify global trends that will impact container shipping industry. The battle for customers will be determined by technology in the end. All rights reserved. With a little bit here and a little bit there, companies that take on a full program of initiatives can boost earnings by as much as 10 to 20 percentage points—enough to reverse the recent trend, and return to profit. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more.

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