At the same time, carriers had to start preparing for the global 0.5% Sulphur cap, which would be introduced in 2020 and would affect up to 70,000 ships, according to IMO estimates. The new trade tariffs affected $34 billion worth of Chinese products imported into the U.S., with China taking countermeasures on U.S. and China, the world’s two largest economies, and the Global Sulphur Cap regulation by IMO (International Maritime Organization). Two other major topics affected the container shipping industry in 2018: the trade tensions between the U.S. The consolidation wave in the industry over the last few years has created a situation on the market, where the top five carriers managed almost two-thirds of global capacity. In addition to the overcapacity issue, the prices for transporting goods have declined.
As a result, the world’s fleet capacity continued growing too fast for the demand to cope with it. Seeking economies of scale and lower unit costs, carriers deployed bigger and bigger ships, already with capacities of over 21,000 TEU(twenty-foot equivalent units). Considering these things, the issue of empty container repositioning is more distressing than ever.Īfter industry-wide profitability in 2017, the container shipping market outlook was not as positive. All of this decreases profitability and puts additional pressure on operations, forcing shipping companies to make tough decisions such as letting go of some of their employees or cutting down trade lanes. In addition to the existing trade imbalances, the COVID-19 pandemic has negatively affected the industry, creating new port and travel restrictions for shipping firms to contend with. Container Shipping Market OutlookĢ020 has brought new challenges for the container shipping sector. In the following article, we will take a look at the major industry trends, what exactly influences the problem of empty container repositioning, and how container shipping companies can solve this problem with the help of digital technologies. The problem majorly influenced by trade imbalances as well as long relocation time, high costs related to safety stock, and unreliable commercial forecasts, which are mainly based on the gut feeling of planners and local managers.įurthermore, there are extra costs associated with storing and maintaining these empty containers, meaning the total cost of empty logistics is estimated by Transmetrics to be more than 12% of operating costs. It sums up to a total of nearly 60 million empty container moves per year at an annual cost of $20 billion to the industry - up to 8% of a shipping line’s operating costs.
Namely, empty container repositioning represents a significant problem - according to the Boston Consulting Group (BCG), one out of three containers is shipped empty. However, the shipping industry still suffers from huge inefficiencies. Every 1 in 3 containers globally is moved empty, and according to Boston Consulting Group (BCG) it costs the industry up to $20 billion per year. In December 2019, the combined TEU capacity of all the container vessels in the world has surpassed 23 million and this number is expected to grow by 3.5% on average every upcoming year. It is the industry that underpins the global economy – the quantity of goods carried by containers has risen from around 102 million metric tons in 1980 to about 1.83 billion metric tons in 2017. Container shipping transports 80% of all manufactured goods around the world.
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