Annual Review and Outlook - Maritime

Annual Review and Outlook - Maritime

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The country's government is looking to improve cargo fluidity at key seaports and border crossings — and reduce traffic on congested roads — via increased use of intermodal rail and a new marine highway program.
Volume growth at US Gulf Coast ports easily outpaced both the East and West Coasts in 2019, albeit from a smaller base, and port officials expect another strong year in 2020.
Ports on the US East Coast are expanding handling capacity and deepening harbors in anticipation of larger vessels and a continued shift in discretionary cargo away from the West Coast.
US West Coast ports competing through infrastructure, technology
Seaports on the US West Coast aim to regain some of the market share they have lost over the past five years to the East and Gulf coasts by building infrastructure and implementing technology needed to move cargo cheaper and faster.
Going into 2020, chassis providers in the US are hopeful that fleet upgrades over the last two years have made the network more resilient, while also acknowledging that there is still little they can do to absorb sudden, unanticipated spikes in cargo.
A busy renewable energy sector and stable oil and gas markets have collided with persistent overcapacity in the multipurpose/heavy-lift (MPV/HL) sector, causing rate growth to sputter and stall.
Spot container freight pricing between Asia and Europe are on the rise thanks to aggressive capacity management by carriers, but analysts say continued lackluster demand will make rate growth more difficult to sustain.
The trans-Atlantic has been the most stable of the major east-west container shipping trades since 2016, with strong growth achieved in both headhaul and backhaul volume, but a recent escalation of trade tensions is clouding the 2020 outlook.
The Pacific Northwest ports of Vancouver and Prince Rupert are moving forward with short-term marine terminal, rail, and roadway infrastructure projects, while on the East Coast, Halifax is extending a container terminal berth to handle larger ships and Montreal is increasing annual container handling capacity.
With growth in trade between Asia and North America projected to continue at a slow, steady pace in 2020, container carriers will be focused on keeping a floor on rates and recouping the added cost of low-sulfur fuels.
With economic growth expected to slow and relations between the United States and its largest trading partners still in flux, cargo owners are expecting low but sustained demand and increased pricing pressure in the coming year.
A tendency of port community systems to optimize operations only within the boundaries of that port and resistance due to competitive concerns are slowing digitization and data sharing efforts in container shipping.
The JOC.com editorial team has identified 10 trends every shipper, carrier, and third-party logistics provider should be watching in the upcoming year.

ARO Commentaries

Maritime transportation companies must equate the cybersecurity threat in 2020 with the physical security threats they faced in the post 9/11 world and take the same layered approach to maritime security that was the hallmark of the Maritime Transportation Security Act of 2002.
The Northwest Seaport Alliance is preparing for another period of transformational change by making major infrastructure investments to redevelop marine terminal facilities at both harbors.
It is hard to predict that liner shipping will have a better year in 2020, but the key to remaining afloat lies in how fast and decisive carriers are able to be in adapting to the uncertainty.
Despite a decline in the global merchant vessel fleet growth rate and the development of new vessel automation technologies, the IMO World Maritime University predicts that that overall demand for mariners will increase over the next 20 years, making the challenges of recruiting and retaining motivated and qualified vessel personnel ever more relevant.
The refrigerated cargo sector, arguably the most profitable for the shipping lines, remains resilient and is poised to grow at a faster pace than the dry cargo sector — 6 to 9 percent — in 2020, driven by population growth, stronger demand for protein in markets like China, and mode conversion from air to sea.
Our industry needs to leverage innovation and technology. Digital supply chains need to make the shift from concept to reality, and terminals need to adapt to these dynamics and help drive them.
In the low-margin business of transportation and logistics, logistics managers must contain costs by finding the path of least resistance. In 2020, that’s efficient cargo movement that wrings delays out of the system.
One of the fastest-growing ports in the nation in container cargo, Houston has seen a 50 percent increase in business in four short years. To remain efficient, reliable, and competitive, the port needs to invest in staying ahead of the demand curve with infrastructure, including cranes, equipment, pavement, and technology.
In 2020 evolving cargo sourcing centers and geopolitics will inform the global trade landscape, but the fact remains that global trade has been and will continue to be resilient.
Modernizing terminals — and in some cases introducing automation — will be the driving force in helping West Coast ports win back business. And beyond the competitive advantage, modern and efficient terminals have the added benefit of cleaning the environment and creating healthier communities.
 With longshore labor peace secured, the New York Shipping Association will focus in 2020 on continued implementation of the provisions of the NYSA–International Longshoremen’s Association agreement in the Port of New York and New Jersey, as well as the ILA East Coast Master Agreement’s limits on automation implementation.
Investments in navigation and land-side infrastructure have generated peak problems among a wide range of ship sizes requiring different levels of terminal capacity that can be solved by implementation of smart port and “chain port” concepts.
 The Georgia Ports Authority’s central challenge of 2020 is staying ahead of exponential growth in demand for intermodal rail service, prompting significant rail expansion at Savannah’s Garden City Terminal.
New technology such as monitoring devices on chassis and remote management of refrigerated containers is helping logistics providers adapt to changing needs. The next step is to use data science and predictive analytics to anticipate the pace and volume of cargo movements and equipment utilization.
AMA Capital Partners predicts that 2020 will be a year of eventual repair and a slow climb back to normalcy. In the meantime, liner profitability in 2020 is expected to be severely challenged at least for the first half of the year.
In a volatile and challenging business environment, carriers will need to take a more all-encompassing view of the supply chain and enhance their value-added services in order to gain a competitive edge.
 The marine transportation system will require a digital and tech-savvy maritime workforce as it becomes more integrated, automated, and increasingly dependent on data and digitization, and maritime education and training must evolve to meet that need.
Forecasting that East and Gulf Coast ports will soon handle 50 percent of the US–Asia trade, the South Carolina Ports Authority will push forward in 2020 with ambitious expansions in capacity financed by a $1.6 billion capital plan.
Executive search within the maritime industry was healthy in 2019, with forward-thinking organizations recognizing the need to develop future leaders via strong succession planning. In a candidate-driven market, with US unemployment at a 50-year low, 2020 is likely to bring opportunities for key executives at some top US ports due to retirements and other factors.
As ship technology becomes increasingly sophisticated, carriers must focus on recruiting, training, and retaining mariners. Key to that effort is using technological advances to enhance mariners’ job satisfaction.