Last year, much of the commentary that focused on the liner trades, was aimed at the growth of the mega-alliances. Despite a slight “bump in road” in June, with the disbandment of the P3 Network, we now have in place the formation of the mega-alliances that many predicted. This, in time, may bring the carriers to some reasonable level of profitability, so desperately needed.
Making the assumption — as of this writing — that the West Coast labor issue will be settled and a contract in place, there is still much to be done. A long list of issues — terminal congestion, technology implementation, chassis model change, lack of a sustainable port drayage industry, and, of course, cyclical and unsustainable freight rates — lead the way.
Competition among ports continues. We are seeing elements of consolidation in this sector that may bring an end to wasted competition and allow natural synergies to take form within geographic regions, specifically on the West Coast. Other collaborative efforts are taking shape.
In particular is the effort being made in the Port of New York and New Jersey, led by the port authority and the New York Shipping Association, with involved stakeholders. This has led to 23 recommendations that hopefully will lead to increased service reliability and sustainability in that region. The 23 recommendations have been prioritized into three tiers, the top of that list being a way to solve the chassis dilemma, and other efforts to reduce congestion and wait times at terminals. It is expected that by the time this goes to print, concrete recommendations will be brought forward. Other regions, though less formal in structure, are bringing stakeholders together to solve issues.
It makes you wonder why this collaboration wasn’t tried before? The landscape of the industry is changing with the mega-alliances, larger vessels and the fear that there will be winners and losers. Let’s hope that this year finds parties willing to work together to find needed solutions.
Michael DiVirgilio, President, Containerization and Intermodal Institute