2015 has been positive for most North American East Coast container ports as the West Coast labor tensions spilled over into 2015 and brought rerouted cargoes to east. Growth at East Coast ports should be maintained in 2016 despite some signs of slowdown. Meanwhile, the U.S. economy is showing more robust signs of recovery. Emerging markets continued to underperform in 2015, yet they should remain a stable source of cargo growth for the foreseeable future as ports diversify their geographic reach. Nevertheless, lingering overcapacity, depressed freight rates and sustained weak demand in the dry bulk sectors will add to the plight of the maritime industry in 2016.
Two things to keep an eye on will be industry consolidation and structural changes in supply chains. Signs point to yet another round of consolidation in the shipping industry that could materialize early in 2016.
News abounds on the CMA CGM bid to acquire NOL/APL, while the two state-owned Chinese container carriers have suspended share trading during merger talks. These two deals alone represent nearly 20 percent of actual global cellular capacity. Meanwhile, embattled Korean carriers seem desperate to raise capital and stay financially afloat. In addition, a potential merger between CP and Norfolk Southern would significantly alter the North American intermodal landscape.
By any measure, congestion levels sustained at West Coast container ports during labor unrest over 2014 and 2015 reached historical levels. Surveys indicate that shipper sentiment may have also reached new lows with a significant proportion of importers intending to relocate distribution facilities eastward to mitigate risk and build resilience into their supply chains. We wonder to what extent these intentions will materialize and if a rebalancing of traffic between the East and West coasts will become structural. This is especially true with the Panama Canal expansion slated to be completed this year.