Over the last two years, the industry has been rocked by changes resulting from troubling economic trends. The losses carriers incurred were wrenching and surprising, and the distress was measured deeply by each shipping company. Each had to re-evaluate how it conducted business and seek out the best decisions to survive. The old ways of doing business came into question, and carriers were required by their accounting departments to review costs at all levels. These newly important accounting departments also became more involved in pricing strategies. This resulted in wide swings in pricing decisions, vessel deployments and operating costs.
Customers in 2009 were also shocked at how the carriers reduced pricing without thinking of the consequences. They were happily surprised and somewhat confused by this sudden change, as it often happened without even a request from the customers. The pricing turnaround in 2010 bothered these same customers as they saw their shipping costs return to pricing levels of 2008. This resulted in political agitation by shippers with a view that something must be done.
It can best be said that carriers and customers learned humility during this time.
Looking to 2011, several things have changed. Various government agencies are actively reviewing shipping activity, particularly with regard to pricing issues. Carriers now must provide detailed information to those requesting governmental agencies.
The world economy is going through a most confused time. Countries are reviewing how they fit into world trade. Currency values and their impact on trading relationships are a point of discussion, and this may result in unpredictable changes in world trade.
Fuel continues to be a concern as it remains closer to $100 per barrel than to $50. The entire transportation chain could be affected by fuel pricing changes, which may result from currency fluctuations.
All parties to international trade will need to be flexible and prepared for the unexpected in 2011.