2013 is expected to be another challenging year for the industry. In view of the economic problems plaguing Europe and the U.S., and the moderate-at-best growth predicted for China, along with the significant new capacity due to enter the market, overcapacity remains a major concern for the industry.
The vicious cycle the industry faces can’t continue. At the end of the day, everybody loses from rate instability and the inability of all players along the supply chain to earn steady, decent profits. I believe carriers, as well as beneficial cargo owners and non-vessel-operating common carriers, will change the way they operate in order to face these realities.
While BCOs will try to keep stable rate levels moving forward, capacity management will be crucial for all carriers. Additional slow-steaming and idling may be necessary. More joint ventures and operational alliances on most trade routes likely will occur.
At the same time, carriers will try to maximize their economies of scale. That trend also is related to the expansion of the Panama Canal, which not only will entail a different focus, but also will improve port operations and feeder networks.
In the U.S., we expect all carriers to begin the final phase of moving away from providing chassis to customers. The chassis pools are adamant about taking over this business from the carriers, so the industry likely will make the final transition this year.