2016 State of Logistics: Ocean freight

Ocean shippers to keep expectations in check

By ·

A recent survey conducted by London-based confirms many of the findings contained in this year’s “State of Logistics Report,” but adds that ocean cargo shipper expectations may be modest at best.

Nearly half of the shippers who responded to the survey said that they expect volumes for the third-quarter peak season to be the same as they were last year, while another 35% anticipate lower volumes. Only 18% predicted higher volumes for container shipping’s busy period.

“The results of the survey confirm that international trade remains sluggish,” says Drewry analyst, . “It will also be disappointing news to ocean carriers that are in need of a pick-me-up in another difficult and unprofitable year as well as to terminal operators, many of whom have under-utilized capacity.”

As noted in LM ocean carriers have taken the unprecedented step of removing capacity in key trades ahead of the peak season in a bid to support freight rates, suggesting their short-term demand forecasts were telling them much the same story.

While the ratio does vary trade-by-trade, the third quarter has generally been the busiest period for the industry, as retailers in the major consumer centers of the U.S. and Europe stock up on goods for the beginning of the school year and the winter holiday season. Between 2008 and 2015, the average proportion of annual world container volumes moved in the third quarter of those years was 26.3%, ahead of 25.4% in the fourth quarter.

“In a generally unpredictable market, this constant of knowing when the peak demand quarters will occur has allowed carriers to plan their deployment strategies accord¬ingly, in turn supporting rate increase requests,” says Dixon.

Drewry also notes that traditionally the third quarter is when carriers have been able to swell revenues through peak season, congestion and equipment repositioning surcharges. However, last year was “a non-event” in the high-volume westbound Asia to North Europe trade when the proportion of traffic only reached 25.8%, marginally better than the second quarter. “The peak was more evident in the Transpacific headhaul routes, but carriers will be wary of losing that predictability of volumes as it could reduce their ability to push through general rate increases and peak season surcharges,” Drewry adds.

Survey respondents opinion that the 2016 peak season will not bring much respite to carriers, with only 18% of all shippers expecting any sort of growth on last year. Drewry researchers say that the poor state of the global economy was cited most for the lack of optimism. Other respondents pointed to lower levels of re-stocking as a reason for their lower expectations, saying that they moved more goods earlier in the year than usual to take advantage of low freight rates. However, this appears to be a relatively rare occurrence, as 82% of shippers said that they haven’t altered their shipping patterns this year.


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [ protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.


Latest Whitepaper
Making the Case for Using a Transportation Management System for Parcel Shipping
We discuss the key pain points that all parcel shippers are dealing with right now and show how a multi-carrier transportation management system can help reduce costs, improve efficiencies, and improve the organizational bottom line.
Download Today!
From the June 2019 Logistics Management Magazine
Over the years, we’ve tried to steer clear of too many themed issues because we’re proud to offer our readers a wide breadth of industry information. The logistics and transportation market is so diverse, and shippers are looking to solve a multitude of challenges across a number of modes and services areas—never just one.

Warehouse Execution Systems (WES) Evolves Beyond “inside the four walls”
Got labor? How supply chain companies are recruiting talent during a labor crunch
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly newsletter!
Latest Webcast
How to Solve The Unique Challenges of Multi-Carrier Parcel Shipping
Join Logistyx President Ken Fleming for an appraisal of multicarrier shipping, TMS solutions and the nuances of interpreting Gartner’s Magic Quadrant for TMS, without a barcode label in sight! Using case studies, review scenarios traditional TMS solutions struggle to manage, such as high volume and international shipping, and learn why parcel shipping requires a different solution and how to design your process and architecture to leverage both effectively.
Register Today!
EDITORS' PICKS
Got labor? How supply chain companies are recruiting talent during a labor crunch
How are companies faring in the race to recruit and train high-level supply chain talent in a market...
35th Annual Salary Survey: Compensation matters more than ever
While job satisfaction remains the primary reason for today’s logistics managers to stay with one...

2019 Rate Outlook: Pressure Builds
In 2019, the world economy will enter a third straight year of broad-based growth, but many...
2019 Transportation Management Systems (TMS) Market Update: Keeping pace with the times
The transportation management systems market is growing right along with the number of challenges...
music videos download

http://bestseller-sales.com/best-sellers-movies/kids-and-family/

4motors.com.ua