This commentary appeared in the print edition of the Jan. 6, 2020, Journal of Commerce Annual Review and Outlook.
Entering 2020, the shipping industry faces a number of uncertainties around trade growth, freight demand, and issues related to the implementation of IMO regulations to lower carbon emissions.
These uncertainties have put a burden on industry forecasting by making the inputs around levels, timing, and goods hard to predict. When we add increased fuel surcharges and uncertain conditions overseas, the likelihood of a general slowdown across most industries rises. As a result, supply chains are predicted to tread carefully, adopting a conservative approach in 2020.
As an asset-based company, CAI International is closely monitoring China–US trade relations, which have reduced trans-Pacific eastbound trade volume as well as the total number of TEU in circulation. As always, we’re looking for any sign of carriers using blank sailings or slow steaming, in this case possibly prompted by IMO 2020. Any of these could be short-term issues, but only time will tell.
Given the uncertain forecast, guidance in navigating the industry dynamics will be critical. CAI International and CAI Logistics will lead the way for our customers with tactical advice and tailored solutions. We believe our personalized service, coupled with the flexibility that CAI is known for, will allow us to exceptionally serve our customers in the 2020 landscape, and our hands-on approach will enable us to better anticipate problems and offer solutions that fit each customer’s dynamic needs.
Even as we strive to address the challenges of rate fluctuations, political uncertainty, and logistical issues, the keys to success will be in having a clear understanding of our customers’ needs, being adaptive to the business environment, and building strong relationships every step of the way.