THE SURVIVAL OF THE SHIPPING INDUSTRY

Ship owners and operators having been facing much criticism over the last six months for both the eduction of sailings as well as the ever- increasing rates. In its defence, the industry naturally blames the pandemic, port congestion and unpredictability of demand. With new crises now developing, what does 2021 hold?

With volumes dropping during the March April period by an estimated 20%, cost management became a survival necessity for many ship operators which resulted in ships being taken out of service. Estimates for the future of global supply chains are extremely difficult due to the volatile nature of world trade going forward. There are many factors involved including the new pandemic threat, currently centred in the UK and beginning to spread in Europe, the negative effects of Brexit on European supply chains, again largely a European issue as well as the urgency to bring manufacturing nearer home and avoid long sea journeys. Everyone in the industry including manufacturers, suppliers, transportation operators and end-users, must look at diversifying risk, introducing more resilience into inventory, and just in time supply chains. There is also a need for all players in the transportation industry to work together in order to find fairer and more transparent operating strategies.

Of course the current conditions have become a “perfect storm” globally and is further complicated by bottlenecks in ports and in onshore road feeder capacity, much of which is seasonal. Customers who are forced to pay more in the future need to understand the reasons and to adjust your own systems accordingly.