While most of us are happy 2020 is reaching a conclusion, despite all the difficulties, we certainly learned a great deal about our customers, vendors, partners, and ourselves. The transformation forced upon the shipping industry by the COVID‑19 pandemic required all stakeholders to be more agile, more transparent, more creative in arriving at solutions, and frankly, more compassionate.
It’s abundantly clear that although our organization was able to seamlessly pivot from an office environment to a virtual operation — learning on the fly and improvising to overcome challenges and adapt to a very different model — at the core of it all, the driving factor to managing the unexpected was the quality of our people and the strength of relationships and partnerships across our business. The disruption to supply chains caused by the pandemic shined a bright light on business processes, disaster recovery plans, and technology, but the quality of people, leadership, and commitment is what carried the day.
To say that everything has changed is indeed an understatement. The lessons learned this year will inform how we conduct our business in 2021 and for years to come.
As we started the third quarter this year, we hit an inflection point, and trade volumes rebounded sharply as lockdowns in North America and Europe eased. Given the uncertainty brought about by the COVID-19 pandemic, the rapid recovery in demand surprised all of us and the global freight network with it.
Ocean carriers who had worked to responsibly match vessel networks with trade demand early in the year had to quickly react to employ additional vessel sailings and capacity. Stocks of container equipment in Asia were quickly depleted, even as lessors and ocean carriers invested hundreds of millions of dollars in new boxes.
However, the current demand surge has something in common with others in our recent history: It will not last.
As was the case following the US West Coast port lockout in 2002, the 2008–09 financial crisis, and the bankruptcy of Hanjin Shipping in 2016, severe downturns in demand are often followed by a period of sharp and sometimes unexpected increases. That puts stress on the global network, leading to congestion, slower cargo flows, and, inevitably, frustration. The usual suspects cry foul and begin pointing fingers, but eventually those conditions begin to subside and more normalized trade patterns return.
And yet, we seem doomed to repeat and debate the same issues and fight the same battles from previous periods of network stress. I certainly don’t have all the answers, but we seem to have missed an opportunity to draw upon lessons learned from prior experiences to chart a more constructive path forward. All stakeholders bear some responsibility here; however, it is the ocean carriers that bear the weight of keeping trade and the economy moving while trying to earn a return on their investments.
For SeaCube, this year was a validation of our business strategy of focusing on cold-chain transportation and the refrigerated equipment market. While retail sales in traditional consumer items like apparel and electronics slowed because people were not shopping in stores, consumers still needed to eat. The refrigerated market sector continues to see steady, stable, and predictable growth and has proven to be very resilient in 2020.
SeaCube’s commitment to stay in stock and in selection with refrigerated equipment gave our customers confidence in knowing that given all the uncertainty, we would be well positioned to support their requirements. SeaCube will continue to be a thought leader in the leasing industry by introducing technology to improve asset operation efficiency. SeaCube will also have a continuous focus on investing in assets that have tangible benefits linked to environmental sustainability. Linked to that differentiation, SeaCube will continue to offer flexible and innovative financing, leasing, and asset management programs that meet our customers’ short- and long-term financial goals.
What’s the biggest issue facing the container shipping industry in 2021? To put it simply: more uncertainty.
The global freight network has proven to be highly resilient, but there is always more to be done. To manage through difficult periods, all stakeholders will need to make investments, perhaps most importantly in collaboration and transparency. There will of course be further investments in infrastructure, and there may be useful new digital solutions, but in the end, it will come down to people, leadership, and commitment.