Looking back at 2017, the ocean carriers have not had the ability to carry the momentum of rate increases throughout the year. Though we saw a strong Chinese New Year and traditional peak in the trans-Pacific eastbound trade, as we moved through the third and fourth quarters, we saw rate levels soften and the gains from the start of 2017 mostly given back.This is especially true with port-to-port rates.
With the expansion of the Panama Canal and the larger vessels, carriers have indicated that they are concerned for 2018 that East Coast’s rate levels will continue to be soft. With continued introduction of larger vessels globally and smaller global trade growth, 2018 could have an impact on carriers’ financial results. We will most likely see a continuation of carrier consolidations as well.
Digitization and process improvement will be the key ingredients to future success — the ability to drive manual process out of the life cycle of the move, and introduce productivity gains has a direct impact on operating margins. However, as we have heard a lot over the last few years about what technology will be the new disrupter within our sector, we see that customers continue to look for old-fashioned customer service and pro-active support in addressing the daily challenges faced in this industry.
2018 will bring some additional complications on the final-mile deliveries of ocean traffic. With the mandate of ELDs becoming law, the industry will see higher trucking rates, which are further compounded by ongoing driver shortages.