The liner shipping industry can finally take a deep breath and rid itself of the unpleasant experiences over the past few years by reporting operational figures back in the black in 2017. With a majority of lines predicting positive results, expectations are high for a good positive momentum into 2018. However, it does not necessarily mean the industry will have a better year, given the global economic recovery is still lurching along its path despite the fact GDP growth is still on the rise.
Needless to say, the most eye-catching industry dynamics in 2018 will be the emergence and full operation of the three super alliances. Mega-ships will gradually become requisite and an industry norm in the east-west trade lane for the alliances because of cost effectiveness. The recently increasing number of mega-ships on the order book supports this assumption. As a result, regional and niche carriers will probably be forced to relegate part of their trunk services to one of the alliances or seek to stand out by providing more customized services. This could be the key to remaining competitive with the industry giants. Furthermore, freight rates could also be depressed by the ripple effect of mega-ship deliveries accompanied by subsequent vessel cascading.
With more demanding and stringent carbon emission control regulations, it is foreseeable that the cost of both building and operating a ship will inevitably increase. LNG-powered vessels may become a viable option in the future, while the industry prepares to deal with the short-term balance between operating costs and environmental issues — a very serious yet interesting question indeed, and one that requires the industry to identify the challenges and search for the best solution in the years to come.