OCEAN FREIGHT | WHAT’S IN STORE FOR 2017?

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At Xeneta we believe there is an untapped potential for everyone in the industry, to systematically learn from our individual and collective efforts. We hold true that "if you cannot measure it, you cannot improve it". That’s why we think actionable metrics is the key to continuously evolve for every business, and ultimately the entire industry. Rethinking global logistics is the vision of Xeneta.

With international experience from the logistics industry, we have first-hand knowledge of the challenges related to high volatility and lack of transparency in the ocean freight market. By combining logistics background and information technology expertise, we found the solution to these challenges.

WE ARE TRANSFORMING GLOBAL LOGISTICS

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FREIGHT RATES?

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A GROWING CONCERN FOR THE FREIGHT INDUSTRY, IS THE LACK OF RELIABILITY ON BEHALF OF CARRIERS, WHICH IS MAKING SHIPPERS MORE THAN A LITTLE NERVOUS. CARRIERS HAVE BEEN DOING EVERYTHING IN THEIR POWER IN ORDER ACCLIMATE TO THE DROPPING FREIGHT RATES AND DWINDLING DEMANDS.

HERE IS OUR EXTRACTION OF LOGISTICS

MANAGEMENT'S ROUNDTABLE DISCUSSION ON WHAT IS IN STORE FOR

2017.

BIGGER SHIPS MEANS BIGGER

PROBLEMS

AMONG THE FIRST QUESTIONS ASKED

BY LOGISTICS MANAGEMENT AT

THE ROUND TABLE WAS HOW WILL BOTH SHIPPERS AND CARRIERS

ACCLIMATE TO THE NEW MEGA SHIPS

BEING INTRODUCED INTO

TRADE LANES?

THE MASSIVE ORDER BOOK AND THE RELATIVELY FLAT TRADE GROWTH OUTLOOK

SUGGEST THAT CAPACITY GROWTH WILL CONTINUE TO OUTSTRIP CARGO GROWTH ...

SHIPPERS ARE BENEFITING FROM RATE WARS AS CARRIERS CUT RATES TO FILL THE SEEMINGLY BOTTOMLESS PIT OF CAPACITY.

CARRIERS ARE NOT GETTING THE FULL BENEFIT OF LOWER SLOT COSTS UNLESS

THEY CAN FILL THE SLOTS.

- DAN SMITH, PRINCIPAL WITH THE TIOGA GROUP

VSAS AND OTHER SHUFFLING

THUS FAR, THE ONLY LONG TERM SOLUTION PROPOSED WITHIN THE INDUSTRY THUS FAR IS THE ACCELERATION OF MERGERS AND ACQUISITIONS, AS WELL AS VESSEL SHARING AGREEMENTS, WHICH WILL ALLOW CARRIERS TO SPLIT ASSET UTILIZATION TO BENEFIT MULTIPLE PARTIES.

LOGISTICS MANAGEMENT POSED THIS QUESTION TO THE ROUND TABLE AS WELL: “SHOULD LOGISTICS MANAGERS EXPECT TO SEE MORE VESSEL SHARING AGREEMENTS [VSAS] AND CONSOLIDATION?”

KEEP IN MIND THAT IT’S LIKELY THAT CARRIERS WILL LOOK TO MAXIMIZE EVERY STRATEGIC OPTION AVAILABLE TO ENSURE THEIR PROFITABILITY, WHICH OF COURSE

WILL INCLUDE MORE VSAS AND CONSOLIDATION. THE REALITY IS THAT SHIPPERS WANT STRONG, RELIABLE

PARTNERS IN THE SUPPLY CHAIN, AND THIS WILL ALLOW FOR MORE PREDICTABILITY

AND LESS VOLATILITY,

- Don Pisano, ocean cargo chairman for (NITL)

BACK ON TRACK?

PERHAPS ONE OF THE BIGGEST SORES IN THE INDUSTRY RIGHT NOW IS THAT RELIABILITY HAS BEEN GUTTERING OUT.

WITH GROWING DELAYS, SNARLS, AND OTHER OBSTACLES THE QUESTION BEING ASKED IS WILL WE SEE A TURNAROUND FOR 2016, OR ARE THINGS GOING TO GET WORSE BEFORE THEY GET BETTER?

IN SHORT, THE JURY IS STILL OUT ON WHETHER OR NOT THE MEGA SHIPS ARE A BLESSING OR A CURSE, BUT AS THEY ARE HERE AND ON THE WATER, THE INDUSTRY HAS LITTLE MORE OPTIONS THAN ADDRESSING THE MONSTER THEY CREATED.

LEARN HOW XENETA CAN HELPYOU GET INSIGHT AND

INTELLIGENCE INTO YOUR GLOBAL OCEAN FREIGHT PRICES AND CHANGE YOUR LOGISTICS

BUSINESS:

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