After the publication of the report from the International Transport Forum on the impact of mega-ships in 2015, the challenges of bigger ships for logistics were debated. The report suggests the new generation of mega-ships has a serious impact on the rest of the transport chain and may add $400 million in annualized costs. So the question is how to mitigate the supply chain risk of port congestion and distribution, as well as how to enhance supply chain performance.
Recognizing that the maritime supply chain is in a constant state of evolution, freight forwarders acknowledge that bigger ships bring challenges and opportunities. Given that a transactional focus will rarely lead to improving efficiencies and wins for the market, opportunities will continue to open up for the forwarder that can innovate and create unique value. Forwarders are becoming more attractive to shippers as the transportation industry becomes increasingly complex because of port congestion, rate volatility, civil unrest, etc. The forwarder of the future will be the glue of the supply chain, managing it better and ensuring end-to-end visibility for customers and suppliers. With this, digitalization is key to improving efficiency. It gives an opportunity for improving traffic management, cargo management and also administrative simplification.
Freight forwarders are equally following the trend of further concentration in the market, which is closely related to the mega-ships leading to service concentration, reduced choice and more limited supply chain resilience, especially because bigger ships have coincided with increased cooperation of the main shipping lines in four alliances. We expect another period of upheaval, with consolidation among top carriers threatening to disrupt the mega-alliances. So there will be ongoing uncertainty, not the least because of overcapacity, which, Drewry has warned, will remain and get worse over the next three years.
An effective supply chain cannot have its actors thinking in silos. By working together with other supply chain parties to innovate and create new services, forwarders will remain a vital part of the maritime logistics environment.