How our industry reacts to the global economic climate will determine which companies survive and maintain their profitability. The financial strength of the air and ocean carriers is essential for stability within our industry. The hope is the Carriers can manage their business in a constructive manner without having to race to the bottom with rate levels that cannot support profitable international business.
With the majority of the ocean carriers currently operating in the red, the concern is how long can this be maintained without carriers either consolidating, enforcing drastic capacity cutbacks or the possibility that some carriers may not be able to survive. This uncertainty leaves the industry volatile and profit margins questionable for transportation providers in 2012. How logistics providers manage through this volatility will determine which companies differentiate themselves in the industry.
The changing and growing global compliance requirements will be a continuous but necessary burden on globalization of our business. Companies will need to continue to invest in resources and time to ensure they meet all necessary requirements. Quality providers will take the lead with government agencies to secure the supply chain from end to end. Partnering up with vendors, carriers, importers and domestic transport companies on global security policies and standards is vital in creating a long term, robust and effective compliance program.
Logistic providers will need to continue to reinvent themselves in both the product they offer and the efficiencies they deliver to their customers. Customers are looking for additional value added services, automation, visibility and ease of doing business from their providers. Although rate competitiveness will always be important, companies need to provide additional value to their customers to ensure long term partnerships and loyalty.