Michael Divirgilio, President, Containerization and Intermodal Institute

https://www.containerization.org
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Michael Divirgilio

2017 saw the results of the previous year’s consolidations of liner carriers and the transformation of the alliance structure and network designs that followed through the year. This eliminated the mystique and brought some sense of predictability to the industry. Services that support the liner industry, such as terminal operators, railroads, truckers, and other landside operations, could finally plan and contract out work based on the routes and vessels deployed on them.

In 2018, we will see more structure to the announced plans to integrate the likes of the three Japanese carriers, Maersk and Hamburg Sud, and possibly some development of the Cosco and OOCL merger. So the ink is not dried yet as more changes to liner routes and vessel deployments are forthcoming. Furthermore, we can see signs of profitability by some companies now reporting and a much more positive outlook being predicted by liner executives. All good signs.

Another positive trend we saw in 2017, and are sure to continue, is the effort of some carriers to change old habits by offering enforceable contracts. We know that five of the major liner carriers are now offering this type of arrangement, and cargo owners (the smart ones) are accepting this as a way to do good business. Last year, I mentioned that the relationship between carriers and cargo owners had to change. Commitments by both sides have to be met. I am encouraged what I’ve seen so far, and I believe this will continue in 2018 and greatly enhance transparency in the contracting process, leading to profitability of the carriers.

So for the first time in quite a few years, I’m optimistic that 2018 will continue with positive news. We have a labor agreement in place on the West Coast, and are working toward a similar agreement for the East and Gulf coasts.