The current state of the economy and the slow climb out of the global recession are the overriding factors affecting terminal operators. To address the needs of the world’s ocean carriers and their changing approach to business, it will be a challenge to react swiftly and effectively to these shifting operations schemes. At the same time, we will need to balance our investment decisions with the long-term outlook of the industry.
Since the economic crisis began, shipping lines have been under tremendous pressure to sustain their business. This has played out in a variety of ways, including carrier consolidations, increased vessel-sharing agreements and reduction in services. These shifts in service and the overall decline in cargo volume have resulted in unsustainably low rates for carriers, terminal operators and most segments of the inland transportation industry. In an environment where customers are demanding increased efficiency, which is often achieved through investment in technology and infrastructure, the current rate levels will inhibit our progress on this front.
Three years ago, the industry was desperate for additional capacity to address what seemed to be insatiable demand. It is now generally accepted that existing capacity is sufficient for the near term. However, terminal operators will need to monitor the pace at which vessels will be reintroduced into service, and plan investments accordingly. The industry must position itself to continue the operational efficiencies of the last year and further remove costs from the system, while planning to accommodate the rebound that will undoubtedly come.