Simon Heaney, Senior Manager – Container Research, Drewry
Since taking office, the White House has pursued very uncompromising trade policies which has seen in the first 18 months of the Trump Administration the withdrawal of the United States from several trade pacts and take a hard-lined approach to many of ongoing negotiations between member-states.
None more so than the recent estimated $50bn of tariffs being placed on Chinese imports over intellectual property violations stemming from the country.
China have taken the steps to respond (in the first instance, targeting the $14bn US agriculture industry), and we continue to observe the diplomatic back and forth between the two countries through the news media and the now notorious Presidential twitter account, the industry can now only wait and see what will happen as the inevitability of two of the world’s economic superpowers are locking into a economic conflict and fears of a global trade war become an actuality for the worldwide economy.
Not only affecting currencies, stock markets and economic growth, this will have a major impact in the global flow of goods across the world. This is alarming for a region whose ports and inland logistics supplies whom rely on the hundreds and thousands of TEU that move across its network.
Any heightening of the rhetoric or retaliations could be catastrophic for a already fragile industry only beginning to show signs of improvement.
Tan Hua Joo, Executive Consultant, Alphaliner – TOC Asia 2018
Opportunities and challenges remain for carriers in 2018. As we have seen, the trade outlook is showing signs of improvement and after the ultimate low of the Hanjin collapse in 2017, one expected a witness a change for shipping where a more disciplined pricing was implemented by the carriers.
What Hanjn exposed was the fundamental weaknesses in the industry of rising costs and over supply — driven mostly by fleet expansion. Has the industry learned from this? Latest estimates would point to the fact that it hasn’t.
Fleet capacity is again starting to increase and a growth of 4%-5% in fleet capacity expected in 2018, the industry will be working with 1.3 million extra TEU with just under half of this new capacity being megaships which will handle 18,000-25,000 TEU’s. This could be very tricky for the sector to accommodate without affecting freight rates dramatically.
Even though this will continue the ongoing squeezing of rates, there are a number opportunities out there for the sector.
The industry appears to have settled into three principal space sharing pacts: the Ocean Alliance, THE Alliance and 2M Alliance. These three alliances alone will account for an outstanding 90 percent of capacity of major routes. These carriers now can truly implement a disciplined capacity pricing strategy and deliver cost savings.
2018 will see the years of consolidation come fully into effect. This new world order must now look to meet the demand of the modern-day consumer where ecommerce is transforming how transactions and trades are done domestically and cross borders and improve its performance whilst balancing controlling and disciplining its investments and costs. This will not be an easy task!
Danillo Figueiredo, VP of International Logistics, AB InBev
There can be no doubt that the latest industry buzzword is ‘blockchain’. No matter what side of the divide you fall on, the concept of blockchain is driving a fiery debate.
To simplify the current procedures – which is very paper heavy, the shipping industry has been inspired by the way that the bitcoin payment system works. The adoption of blockchain technology brings with it many benefits including the real time update on the movement of goods, higher accuracy through automation, transparency, increased security and cost savings.
For an industry that remains very traditional in its processes, blockchain stands to revolutionise how goods are moved across the world and revolutionise how we trade.
Not limited to blockchain, artificial intelligence, robotics, Big Data, 3D printing, the Internet of Things, communication technology, augmented reality and nano technologies are converging on the industry to create a supply chain model where everything is digitized, connected, shared, personalized and directly available to all.
Digitalization is distorting the boundaries between manufacturing, retail and logistics and current business models are evolving towards a supply chain consisting of automated, autonomous and connected intelligent assets which are changing the fundamental dynamics of globalisation.
With an astounding $14.2 trillion to be realized through digital business by 2022, the time for digital is now!
Eric Legros, Head of Reefer Operations, CMA CGM
Fresh produce trade is critically important in this region and Panama is utilising its unique geographical position to invest and transform its cold chain infrastructure. Developing a modern national temperature-controlled supply chain will have a huge impact on food production and distribution and will include the input from industry actors such as Panama Canal, seaports in the Atlantic and Pacific shores, Colon Free Trade Zone, Panama Canal Railway, Tocumen Airport and COPA Airlines, and special economic area Panama Pacifico.
With ports, carriers and cold storage providers investing large sums to support cold chain logistics across the Americas, the opportunities and challenges to maintaining growth in cool logistics trades continues to dominate the Americas.