There are several reasons to be positive about the future of our industry. First, there are several recent indicators pointing to a global economic recovery and stronger demand for international trade due to continued outsourcing and containerization. Second, though a full economic return to pre-recession levels may take longer, the shipping industry’s recovery should be sustainable given the cost-cutting measures and increased efficiencies realized during the downturn. Third, the recently negotiated waterfront labor agreements will provide predictability in the coming years.
Moving forward, the challenges our industry has encountered will start to change behavior and culture. The keys to success for carriers will be less emphasis on fill factor/market share and more on profitability. The key performance metrics will be preserving cash, building and maintaining a strong balance sheet, continuation of aggressive cost-cutting and sustainable rate restoration where owners and operators earn a reasonable return on invested capital. Stability and long-term profitability can only be achieved by a transformation of the industry’s pricing model and contracting processes that stabilizes cyclical swings in the economy and fuel prices.
Most if not all pundits had forecast the demise and consolidation among global container shipping companies. The lesson learned is that it’s not in anyone’s interest that the industry encounters disruption. The sight over the bow is not exactly smooth sailing, but the seas seem to have calmed for now and hopefully the wind will shift in the right direction going forward.