Transport is often seen as the harbinger of the broader economy. The authors wish to thank John Chen for his contribution to this article. The reason being coronavirus and border fallout. But shipping companies cannot afford to throw up their hands and accept their fate. “We expect healthy freight rates to continue in the short term, although potential pressures from trade protectionism and resulting localization of supply chains, weak economic recovery and slipping supply discipline may affect rates in the longer term,” says Fitch. In turn, profits have become exceptionally volatile. A comprehensive commercial program, covering the full gamut of commercial activities from pricing strategy to contracting strategy to uptake management, can deliver immediate bottom-line impact. Become a PLUS+ subscriber and you'll get access to all Supply Chain Management Review premium content including: PLUS+ subscriptions start as low as $129/year*. 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. The future of the container shipping industry 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. India’s exports have bounced back rather spectacularly, said Maersk, the world’s biggest container shipping line. The company also struggled with aggregate invoices (vendors would combine all their charges for the month), invoices that did not reference purchase orders, and so on. Nice Blog!! The restrictions resulting from the military level tensions reflected on the imports. While leasing may be the only option for many cash-strapped liners that already have substantial debt, other lines should take advantage of this by owning more of their fleet. This is a list of the 30 largest container shipping companies according to Alphaliner as of 10 June 2020, ranked in order of the twenty-foot equivalent unit (TEU) capacity of their fleet. It certainly fulfilled that role in the recent economic crisis, as business fell off precipitously. For shipping products, shipping lines use containers, and the prices of shipping containers to countries such as the US and Africa have more than doubled in the past few months. A review of the total cost of ownership can reveal some surprising anomalies; the container with the cheapest purchase price often costs the most in the long run. Summertime means time for recovery and reflection. This affects the costs for carriers, while at the same time all parties of the logistics chain are keen to work with companies that offer sustainable transport solutions and good working conditions. Some of the challenges that companies face―the supply/demand imbalance, and swings in demand―are systemic, and beyond the ability of any one company to fix. But that hinders motivation; employees become uninterested in challenging the status quo or in making changes in the way they work. 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 industry is investing in technology in order to lower the impact on the environment and shipping is the greenest method of transportation today. Three levers account for most of the costs and thus deliver most of the impact: bunker management, procurement, and asset utilization. We expect the challenges to persist, especially with new capacity coming online, but argue that container-shipping lines must not give up in the face of market adversity. Learn more about Mailchimp´s privacy practices here.
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