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The shipping industry is sensitive to the changing circumstances of the global market as much as any other sector. Market conditions and economic growth influence how shipping has changed and will evolve in the future.

If a shipping company does not adapt to the global trends, it will find itself behind, and its logistics chain will suffer. Free trade is the idea behind all global shipping, and although this is a perennial foundation, the industry is ever-changing and adapting.

Some evolutions include modifying ports to accommodate large cargo ships, containerization, new technology, and a more ecological industry. Here are some details about these global trends in the container shipping industry.

Supply and Demand

Over recent years, the shipping industry has seen the tonnage ratio to the number of vessels become more balanced, which is a positive trend. Today shipping lines are increasing the tonnage of their ships, but not the number of vessels.

Shipping companies are also avoiding scrapping current vessels and using the ones they have. The number of idle ships severely decreased between 2015 and 2018, from 330 to 65, saving hundreds of thousands of two-foot equivalent units (TEUs).

But the ships these companies have are massive, which puts more pressure on the ports that service them and the terminal operators that receive them.

More Pressure on Ports

Since the ships in the logistics chain are getting bigger, with many exceeding 20,000 TEUs, this puts more strain on the ports, creating unavoidable congestion and conflicts. A smaller port can’t handle a large ship’s capacity and cannot deal with the cargo in an efficient manner. For your logistics chain, this means delays, demurrage, and decreased customer satisfaction.

It would help if carriers called upon a range of ports to spread out the pressure and avoid bottlenecks. It’s risky only to have a few ports managing the majority of the large-scale logistics.

There is no benefit of open-market competition if terminal operators only sign on with one or two alliances, as this hinders the market and creates logistics flow barriers.

The Influence of Emerging Markets

Although China has been center stage in supply and demand with its vast population and manufacturing industry, new markets are emerging.

Nigeria, for example, is growing at an extraordinary rate. With an expected population of 440 million by 2050, this African country is becoming a significant player on the world market stage.

Containerization Plays a Lead Role

Emerging in the late 20th century, containerization is the shipping practice of packing many units into one large container unit. There are quite a few benefits to this method of transporting goods, including decreased cargo handling, increased cargo protection, and lowered shipping costs.

Industries are now adapting their goods and products to this container shipping method to spend less and streamline their logistics chain. Some of the products predominantly shipped in large containers are peat moss, timber, paper, fertilizers, scrap, and waste products.

Sustainability and Environmental Concerns

Technology and methodology across the shipping industry are adjusting to more eco-friendly methods in every sector.

New regulations force the industry to evolve into a more sustainable model as ships and ports adapt as quickly as possible. Modern technology makes this shift easier, but it also requires a significant financial investment to make these modifications.

Shipping by a large container is one of the greener transportation goods since one large shipping vessel can take tons of units.

New Technology Affects Buyer and Seller

Amidst an ongoing technological revolution, a shipping company must stay flexible to maintain a stable consumer base. Everyone along the logistics chain must invest in requisite technology to keep the shipping industry as sustainable and efficient as possible.

More transparency along the entire logistics chain and the use of one common platform would help the shipping industry maintain its balance every step of the way.

Switch from RO/RO to Containerization

For short sea transportation, roll-on/roll-off cargo ships have been the standard method for decades, but that trend is changing.

RO/RO vessels are cargo ships designed for wheeled cargo that can be moved on and off the ship by ramp and wheels. As a counterpoint, shipping in larger containers is growing, especially in the intra-European market share.

The RO/RO vessels, although they rule short sea transport at the moment, are becoming older and less reliable as containerization takes over.

The Final Word

The shipping industry needs to adapt to stay healthy. Just like any industry, if the logistics chain doesn’t evolve, adopting new environmentally-friendly regulations or better technology, they will self-destruct.

However, if a shipping company can manage to stay ahead of global trends like containerization, enhanced ports, and larger vessels, it will be smooth sailing in the future.

Streamline your supply chain with Asiana USA third-party logistics. Our warehousing, fulfillment, drayage, and freight forwarding services connect you with a vast network of industry-leading shippers and carriers. For more information or a freight quote, contact us at (855) 500-1808.

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