If necessity is the mother of invention, then 2009 was the year of necessity and 2010 was the year of invention. Several emerging trends in the international container shipping industry suggest fundamental change may be under way.
First is capacity management. For perhaps the first time in the industry’s history, carriers have discovered a way to balance capacity despite weak demand and an unprecedented order book. Through a combination of slow steaming, realignment of networks and creative juggling (postponements, switching and cancellations) of the order book, vessel operators have balanced supply and demand and sustained rate restoration.
Second, the container shipping industry appears to be well into the process of aligning chassis ownership in the U.S. with the rest of the world. Many global carriers are implementing chassis divestiture programs and the rest will undoubtedly follow. The lack of protest or disruption has made this initiative more remarkable.
Finally, container lines are realigning their North American inland networks. The operational and economic benefits appear appealing and a move toward more port-to-port service and fewer door-to-door offerings in second-tier markets may be in the offing.
In 2011, the U.S. freight transport industry likely will benefit from the 2010 congressional elections. The change in the House will likely ameliorate the mounting pressure to re-regulate the rail and ocean carrier industries. A more positive, albeit tepid, economic recovery will improve the demand side of the transport equation.
The proverbial $64,000 question is whether the ocean carrier industry will continue to adroitly balance supply in the face of significant vessel deliveries and modest demand growth, particularly on Asia-Europe and trans-Pacific lanes. The combination of slow steaming, increased transshipment and a resulting increase in port-to-port services should enable the ocean carrier industry to build on its 2010 restoration programs.