SHENZHEN, China — The health of the container shipping market will be better in 2013 and continue to improve in the following years, but growth will still be slow, requiring carriers and shippers to forge “a new type of cooperation,” Cosco Group Director and President Ma Zehua said on Wednesday.
Ma said he is optimistic about the future largely because the International Monetary Fund forecasts trade will expand 4.5 percent year-over-year in 2013, the supply-demand relationship will be more balanced, and European and U.S. markets will stabilize slightly.
Global container volume will grow 4.1 percent next year compared to 3.9 percent expansion this year, while total container capacity will expand 4.3 percent, a 2.4 percentage point decrease from 2012 growth, Ma told an audience of more than 500 at The Journal of Commerce’s TPM Asia Conference in Shenzhen, China.
He cited Organization for Economic Cooperation and Development statistics forecasting European imports will grow 2.2 percent in 2013, compared to a decline of 0.8 percent this year, while U.S. imports will jump 6.3 percent, a 2.5 percentage point improvement from this year.
“Recovery of the European and American markets will help improve the balance of transport for export and import, maintain stable freight rates and support container market recovery,” Ma said.
To best tap this expected global growth, container lines must gain a deeper understanding of their customers’ needs, better match supply to demand and improve overall service.
“The drastic volatility of the industry over the past two decades did not only threaten interests of consignors and shipping companies, but also harmed the stability and sustainability of services in the industry,” Ma told the audience. “We cannot go through history once more; we need a new type of cooperation.”
Container lines need to make more commitments on service to shippers, and Cosco Group plans to do so but also needs it customers’ help, he said. The creation of longer-term partnerships, and even fixed-term agreements, along with increased cooperation with logistics provides, terminal operators, non-vessel-operating common carriers and other supply chain interests, will further this aim.
“To achieve this, I think, shipping companies are supposed to, first, extend their transport network through cooperation and joint operation; second, if we have to introduce larger vessels to improve efficiency, we should do it through cooperation with other partners rather than each company acting on their own,” Ma said.
This also will allow carriers to provide cheaper service without adding too much capacity to a single market and order new vessels with their partners, as to reduce new orders and create a more “self-disciplinary market.” He warned that despite the best efforts, “volatility in the shipping market is inevitable.”
“We must pay more attention to changes in the market, details in the management, value in service and opportunities in cooperation," Ma said. “Only by doing to can we have orderly, sustained and healthy development.”