Within our 2015 Predictions for Industry and Global Supply Chains (now available in complimentary research report- see note below), Prediction Five indicates a turbulent upcoming year in global transportation.
Supply Chain Management Review recently featured highlights from an interview with the Research Manager of Drewry Supply Chain Advisors regarding the state of the ocean cargo industry. We call attention to this interview because portions point to what can be expected in ocean shipping this year. For readers unfamiliar with Drewry, the firm is globally recognized in sea freight market intelligence and benchmarking and a specialist advisor in international sea freight procurement.
In the interview, Drewry Research Manager Marin Dixon indicates another year of freight rate market volatility and that supply-demand equilibrium will not return until 2017 at the earliest. Ocean container carriers will continue to be challenged by overcapacity.
Regarding the ongoing disruption involving U.S. west coast ports, Drewry expects U.S. port congestion to remain an issue with cost implications throughout 2015. The consequence is noted as more shippers considering options to protect themselves against future labor disruption risks by shifting routings to alternative ports.
Regarding ocean container shipping lines, Drewry expects more alliance consolidations over the next few years as carriers seek to leverage economies of scale and respond to market dynamics for unit cost leadership.
All in all, and as noted in the previous posting, another reinforcement of continued industry turbulence.
Note: We are experiencing technical issues within our Supply Chain Matters Research Center. If you desire a complimentary copy of our 2015 Predictions for Industry and Global Supply Chains, please send an email to: supplychaininfo <at> theferrarigroup <dot> com. Please insure you include your name, role and return email address.