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Signs of improvement in the outlook for global container shipping companies began to show at the end of last year, when rates began to climb during the peak season. However, overcapacity continues to haunt the industry and could prevent it from achieving a sustainable recovery.
Alphaliner, a Paris-based maritime consultancy, cut its forecast for global container throughput growth to 2.5 per cent in 2019 from 3.6 per cent, as business fell in the first half of the year. The forecast for container volume growth for the whole year has also been affected by the expected decline in trans-Pacific traffic volume between China and the United States.
"despite the uncertainty in the global trading environment, container throughput is still expected to grow positively in 2019, albeit at a much slower rate than in the previous two years," said Stephen Fletcher, an analyst at Alphaliner. Overall throughput increased by 6.7% and 5.2%, respectively, in the previous two years. "
According to a sample of more than 250 ports compiled by Alphaliner, global throughput grew by just 2.8 per cent in the middle of the year, down from 6.6 per cent in the same period last year and 4.7 per cent in the fourth quarter of 2018.
In addition, growth rates are unevenly distributed across regions, Fletcher added.Negative growth in cargo traffic in some emerging markets has dragged down global growth rates. Throughput fell in three regions, down 10.1% in the Middle East, 4.4% in Africa and 1.1% in Oceania.
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Among the rising ports, ports in China and the United States reported healthy growth in cargo traffic in the first quarter of this year, despite continuing trade tensions between the two countries. Chinese ports, including Hong Kong, grew 4.2 per cent in the first quarter, Shanghai by 7 per cent and Guangzhou, Qingdao and Xiamen by more than 8 per cent.
"the escalation of the trade war between China and the United States is expected to bring down the growth rate of container throughput between the two countries in the coming quarters," Fletcher said. " "over the past summer, Oceanic Alliance Airlines has announced two invalid trans-Pacific routes, which are expected to decline, as the spot price of the Trans-Pacific Ocean on the West Coast has fallen by 15% in the past two months. More airlines are expected to follow suit. "
You can't turn a huge freighter around. Even in some of the world's best supply chains, repositioning chemicals and other products is a daunting task. When shipping to unstable countries, it is even more difficult. For US companies operating globally, one of the most effective ways to reduce risk is to deliver goods more wisely.
In the current political environment, American companies should seek to work with more stable countries that are unlikely to change tariffs. Take the Netherlands as an example. In 2017, the United States had a trade surplus of $24.5 billion.
I have been engaged in supply chain management for more than ten years. There are many one-way check valves in the supply chain process. Once the goods are shipped, there is no "estoppel". This is why supply chain managers always emphasize demand forecasting, which is one of the most critical inventory management practices. Given that our international customs law has become more dynamic over the past three years, the transportation of goods in the United States is more complex than in the past.
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Anyone by air or sea can prove that international shipping is complex-largely because of the rules and regulations of certain goods. Obviously, harmful substances can cause some problems. The culture that lives in it, a lot of metal, and even telecommunications equipment.
But it is not just international law that complicates the issue. Everything from tariffs to inspection of goods can cause bottlenecks in the supply chain. Even if one item in the container is marked, it can prevent the entire ship's container from passing through the dock gate. It can then be retained until a more thorough inspection can be carried out, which may incur additional costs.
Further complicating the situation, some countries will detain goods from the United States solely on the grounds of goods from the United States. In countries such as Saudi Arabia, every container must be inspected.Needless to say, these situations can add a lot of time to the transportation of your goods, resulting in an inefficient supply chain, sometimes equivalent to imposing additional tariffs on your goods.
As a former geographic marketing manager, I can tell you that a global operational perspective can help you appreciate the manpower and logistics needed to transport goods from one place to another. It requires a lot of coordination-as well as a large number of trucks, ships and aircraft-to keep the supply chain running smoothly.
That is why it is so important to have a degree of knowledge of global operations as a US supply chain expert.
