What started out as a promising and hopeful 2008 ended with a great deal of surprise and uncertainty. One can only hope that the new administration will be successful in passing an economic stimulus package that will not only kick-start the economy and restore consumer confidence but also address the housing foreclosures, credit constraints, dire state of the U.S. infrastructure, encourage free and fair trade, and create millions of new jobs.
These are unprecedented times that require innovative and creative solutions. The U.S. must lead in the global economic recovery.
The challenges our industry faces will be unprecedented and demanding. International trade has always been cyclical, rising and falling with the economic times. Never before have we had to deal with so many variable dynamics as swings in bunker prices, charter hire rates, new capacity, currency fluctuations, uncertainty in demand, shifting global sourcing and rising operating costs.
The only certainty in this state of uncertainty is that the cost of delivering the services required must be offset by the revenue generated. The last thing the industry needs is the fluctuation of pricing in the global supply chain.
If the market overreacts to these dynamics and creates a market level that does not provide an adequate return on investment, the consequences could lead to further disruption in service levels and service delivery. It is the latter that eventually leads to customer dissatisfaction, defection and higher costs.
To that extent, carriers and customers will need to proceed with caution when negotiating new contracts, recognizing the cost pressures of both parties as well as the importance of rational and responsible pricing.
These are uncharted waters. To weather this storm, we must rethink how we conduct our business and our lives. Once known as the “throw-away” society, we must challenge ourselves to do more with less.
We must simplify our processes and reduce operating and overhead costs while adjusting to this volatile and unpredictable economy.
We must form stronger and more durable partnerships to share our assets, our best practices, expand the use of technology and define green-friendly ways of doing business to preserve our environment.
We must reward those who take risks and invest in our future — whether it is building container ships, investing in global sourcing or fixing our infrastructure.
And the recovery will come. The cycle will again turn upward, but will we be able to say we have changed our course for the better? That is the challenge for all.