The past few years in the container cargo business have felt like running in soft sand. Just when we think we’ve found our footing, the sand shifts again.
During 2016, we experienced what we once thought impossible: 18,000-TEU ships, larger shipping alliances among fierce competitors, and Hanjin Shipping’s bankruptcy announcement.
This year is likely to be the hardest race yet in the shifting trans-Pacific trade.
Seeking economies of scale to quell their losses, shipping lines continue to introduce ever-larger vessels into service. This additional capacity in the system drives down rates, which contributes to further financial pain.
To fill the ships, carriers are forming even larger alliances among themselves. With these alliances slated to take effect this spring, we are likely to see a shuffle among terminals and ports of call.
These changing times mean ports need to think and act differently, too.
It’s no longer enough to develop world-class terminal facilities, believing the cargo will come. We must take an active role in working with our partners to build a rigorous performance management system using real data to drive more informed decisions. That means convening terminal operators, labor partners, shipping lines, cargo owners, and railroads to develop metrics that gain tangible efficiencies throughout the system.
We must partner closer than ever with our customers and stakeholders on investments inside and outside the terminal gates to keep cargo moving. We must adopt and introduce innovative technologies that give real-time views into operations so customers can plan more effectively. We must partner in new ways to leverage our strengths and align our interests with a strong focus on gateway performance and consistent, reliable service.
There are no guarantees in this fiercely competitive marketplace — other than, if we don’t adapt, we risk losing the jobs and economic benefits on which our communities and customers rely.