No other industry has been hit harder in recent years than the global shipping industry. The industry has been greatly affected by the global economic woes that have dramatically limited volume growth all around the world. At the same time, however, the industry can’t blame all its current challenges on the struggling economy. Rather, companies need to focus inward to gain a further understanding of what problems exist within their own corporate structures, and determine how to approach fixing those problems.
In the purest form, the global shipping industry’s constant challenge is simply one of supply and demand. Even though the so-called Great Recession officially ended in June 2009, global shipping supply continues to outpace global shipping demand. To worsen matters, ocean carriers still are taking on debt in efforts to further add capacity to an already over-saturated market.
Without some sort of slow-down on new building, the industry challenges will worsen and rate levels will continue decline further.
Unfortunately, given these circumstances in the global economy and these internal industry issues, 2012 most likely will not be a year of economic prosperity, but instead is likely to be another year where most shipping companies struggle to simply get by. As a result, it’s probably also safe to expect a continuance of both financial and operational restructurings, and further consolidations.