Digital solutions are creating a more visible, predictable and efficient environment for containerized trade, the backbone of global commerce. Platforms that aggregate and provide secured, channeled access to key shipping data will give us the ability to extend the line of sight that cargo owners, marine terminals, port-side service providers, and asset managers have over millions of container moves.
Emerging technologies and operational changes are requiring innovative thinking, which sometimes comes at a great cost. Some would say it’s the price to pay for progress. Others will ask where the money will come from. Public-private partnerships, federal and state funding, and smart business practices will ensure financial stability to support vital projects to meet current and future demands.
Politics, coupled with the ongoing threat of global terrorism, is creating greater demand for global trade management software than ever before.
There is little doubt that the pace of change in the transportation and logistics space is accelerating. Regulations, a lack of adequate infrastructure investment, and a shortage of willing, compliant workers threaten to create a freight transportation capacity shortage in 2018 that could be severe enough to constrain the overall rate of macroeconomic growth across the US.
US seaports require the continuation of existing tax incentives and grant programs to become more efficient and remain competitive in this new age of alliances, consolidation, and mega-ships. I am hopeful that Congress can identify long-term infrastructure financing strategies that provide tools to encourage and sustain seaport growth.
The Gulf region, and especially Florida, are also major players in the trans-Pacific trade with Asia. Ports have expanded their post-Panamax capacity, and are well positioned to accommodate upgraded services, with room for additional expansion.
Does size matter, and, if so, where will it take us?
The trickle-down effect of cliner onsolidation has really yet to manifest as everyone from port authorities, terminal operators, stevedoring companies, railroads, trucking, logistics companies, organized labor, maintenance companies, IT providers, BCOs, and NVOCCs, etc., consider how to adjust. Continually improving the efficiency of our global supply chain is in the interest of all stakeholders, and it will indeed evolve. How we achieve this continued efficiency will depend in part on the suppliers and customers of the liner carriers.
With the consolidation of carriers and the formation of mega-alliances, there is an opportunity to concentrate volumes and, with time, evolve into an ongoing redesign of vessel networks that will challenge the ports, marine terminals, and intermodal operators in a significant way.
The intermodal equipment provider’s world has changed dramatically and is squarely positioned to continue to do so this year and beyond.
The decade-old imbalance between cargo demand and multipurpose/heavy-lift capacity continues with no forecast for any significant change. The prospect of stagnant cargo flows has now been accepted by many industry insiders as the new norm. Even with negligible new ship orders, the forecast for improved earnings is impossible to predict, particularly in a market where so many vessels continue to be supported by banks unwilling to call non-performing into default.
As a large, incredibly complex, and highly fragmented industry, global logistics is in transition, being under enormous and growing pressure to improve its efficiency and performance.
An outlook of cautious optimism for 2018 looms in the container shipping industry as everyone keeps watch on challenges from oversupply while signs may indicate healthier demand growth in the overall market environment. Many carriers will also need to observe the rapid changes in the e-commerce, IT, and digitization space to invest in the right technologies that would give them the competitive edge and ability to provide superior services and enhance operational integrity.
E-commerce has been and will continue to be the dominant trend for the foreseeable future. Increased volumes and faster delivery require a comprehensive supply chain from import facilities to fulfillment and sortation centers to last-mile depots. This is requiring developers and investors to understand the needs of e-commerce vendors and provide new solutions to meet the delivery expectations of the consumer.
Are we ready for disruption? At our recent Supply Chain Summit in Singapore, Jimmy Koh, managing director of United Overseas Bank, made startling observations about the sharing economy.
There are three areas that are impacting our client’s business that we will be focused on in 2018: truck capacity; the instability in the ocean freight market; and exceeding the On-Time, In-Full (OTIF) policies with retailers.
Drivers play an important role in keeping freight moving and deserve more respect, for instance being treated like a “customer” at intermodal terminals and customer locations. Our industry needs to work to maximize their utilization as they become an even more valuable supply chain component after ELD regulations kick in and driver compliance is fully enforced. Delays at ramps, ports, and customer destinations will need to be reduced and ultimately eliminated.
The constant evolution of technology is here to stay. To be successful in the future, companies need to embrace technology solutions that are right for their business and harness the data that is produced to inform decision-making and improve the performance of the intermodal supply chain.
Global climate change impacts merchant shipping and is exacerbated by it. Forward-thinking governments and investors must find ways to support the research needed to advance and deploy fossil fuel alternatives.
Cargo in transit (by rail and truck) is one of the largest risks covered under inland marine insurance. Cargo theft is a major concern.