In 2011, the container shipping industry again dampened prices to a level at which even the largest carriers lost money and invited the concerns of many stakeholders. Contrary to the comforting statements and dreamy expectations of numerous ocean carriers, it seems the lesson from the economic downturn of 2009 was not fully learned.
Carriers were too slow in adjusting supply and too quick in adjusting prices. Carriers’ effort to blame price sensitivity on shippers or non-vessel-operating common carriers no longer seems to receive much sympathy. Even some beneficial cargo owners ask us why the industry does not eliminate excessive supply. They are aware that, in the end, it’s only carriers, rather than shipbuilders or shipowners, that decide to implement it. If we look at other industries, liner shipping has little reason to complain about its legally restricted environment. It can be and has been done even under current legislation.
Business is unpredictable. Volatility isn’t going away soon. Many shippers foresee low visibility again for 2012. Trade may have sudden surges or downturns with short intervals. This situation seems to have become a new normal and will remain for quite some time. Current financial strain will inevitably see carriers make speedy service changes.
Under such situation, shippers will need to share their forecasting and shipment plans with their core carriers, perhaps with less transactional relationships. Shippers will continue to benefit from the development of close partnerships with reliable carriers.