Sunday, July 27, 2014

FUTURE OF CONTAINER LINES & SUPPLY CHAIN UNCERTAINTY

There is much discussion on the future of container shipping.  Specifically it is about how many carriers will be in business--and how many will not be.  Fifteen carriers are in the Transpacific-Stabilization Agreement.  These are global carriers that participate in other major trade lanes.

The implementation of large ships to achieve lower costs has created a chasm with the carriers between the "haves" with these ships and the "have-nots" without these ships. With the way rates and profits have been and are going, it is easy to project fewer carriers in business, whether because of their operations or because of subsidies from their countries.

Fewer carriers would likely mean higher rates for the remaining container lines.  What will shippers/BCOs and NVOs/OTIs do, especially those who chase cheap rates?  Supply chains disruption?  Pricing chaos for exporters and importers?  Many NVOs out of business without cheap rates to sell?