John Manners-Bell, Chief Executive of Transport Intelligence and Founder of the Foundation for Future Supply Chain, moderated a panel of shipping industry experts at TOC Europe 2024 on 11th June. The panellists presented on the state of the market, looking at the data, exploring the trends and examining resilience. Will the cycle of boom/bust continue, characterised by adversarial relationships between shipper and carrier? It seems likely… As Peter Sand, Xenata chief analyst told delegates, the Red Sea crisis and bursts of regional port congestion continue to present problems to container trades, while the looming threat of tit-for-tat tariff wars is causing demand spikes.
Lars Jensen, CEO and Partner at Vespucci Maritime, talked about an unstable, highly unpredictable environment: port congestion is still in pandemic level territory, rate levels are likely to go back up to pandemic levels too; in the Red Sea, sanctions aren’t having the desired effect – the West has become more irrelevant as the trade wars intensify; freight forwarders are becoming increasingly fragmented; there are more concerted cyber-attacks occurring against the top three container terminals in the world; consolidation is becoming more common – Intra-Asia is the largest consolidation in the world and a major battle ground. “How can shippers navigate this unpredictable environment better than their competitors? It’s a matter of being flexible and adaptable as everyone is in the same situation.”
According to Lamia Kerdjoudj, Managing Director – Secretary General at FEPORT (Federation of European Private Port Companies and Terminals) the profile of ports is changing. Getting back to normal will not happen quickly in this disrupted world. Ports used to be essentially used for trade and commercial activity, now many ports have taken on renewed importance from a military and defence point of view, including the dual use of port infrastructures. Drug trafficking has become a real problem, but checks can be disruptive, from both a non-shipping related and cargo handling perspective. “We are living in a very difficult moment, facing many crises at the same time. We need to focus and make choices, as there is so much uncertainty”.
Prof Dr Indra Vonck, Partner at MTBS (Maritime & Transport Business Solutions) said we need to stop being inwards focused and instead look outside of the box. Ports are globally connected supply chains and state-owned enterprises which drive wealth. They are extremely resilient. “It is an interesting industry for investment if this is matched to the current situation, not just investing to invest”.
Olaf Merk, from the International Transport Forum at OECD, stated that container routes are the least resilient in shipping and every disruption is an opportunity to raise prices. “This is a poly-crisis with cascading effects”. A local crisis becomes a global crisis as the shipping industry is so interconnected. Supply chain crises are the new normal and so is serial price hiking. The container shipping market has become used to cyclicality over the decades, but it is still evolving – it is the younger sibling in shipping, as in the tanker and dry bulk markets volatility is nothing new.
Omera Khan, Founder and CEO at OQK Associates also spoke about a poly-crisis. She said that supply chains are being rewired at source and destination. There are now more strategic collaborations between service providers and ‘ugly duckling’ solutions are needed to develop more resilient supply chains.
As Gavin van Marle from The Loadstar aptly said, “this opening session at TOC largely revolved around one thing – or several, depending on your perspective – the rolling wave of crises that continually threaten container supply chains”.
Author: Julia Swales
Source: Ti Insight
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