It feels like only last week when I was writing the 2015 outlook note, and here we are thinking about 2016. It will be no less interesting — a presidential election in the United States, evolving geo-political developments, gradually raising interest rates in the U.S., fresh stimulus in the EU, a strong U.S. dollar, potential liner industry consolidation, and reshaping east-west alliances, to mention a few ponderable elements.
Terminal operations and stevedoring in North America
In 2015, we saw solid volumes in the container and roll-on, roll-off industries, and we expect the same in 2016. Business remains tough, however, and in need of a roll-up strategy that improves service quality and reduces cost.
Container shipping
There was some redistribution of cargo to the U.S. East and Gulf coasts in 2015, initially the result of West Coast congestion. Suez Canal routings also increased, however, as origin supply points developed; the Suez routing is by far the biggest long-term threat to West Coast ports as commerce continues to find the path of least cost to market. We will see volume growth in the U.S., but it will be marginal.
Turbulence in the liner industry may lead to some consolidation this year, but it’s unlikely to alter the industry in terms of reduced volatility near term. We seem certain to see imminent changes in the major alliances whereupon terminal operators and stevedoring companies will see swings of volume and certain price pressure. Cost will be king, 14,000-TEU vessels will become the global workhorse during the next few years, offering slot economies and a sweet spot in terms of port selection flexibility.
Roll-on, roll-off transportation
Robust in overall volume in 2015, we can expect to see continued growth this year as long as consumer sentiment remains high.