According to Unctad, slower demand coupled with a continued oversupply of vessels could bring increased consolidation among carriers. Despite that in 2018 there are signs for a continued positive recovery, the trend of carriers consolidation will continue as it improves economies of scale and reduce operating costs for many shipping lines.
The last years occurred different type of shipping consolidation, such as mergers and mega alliances, like 2M, O3 etc. This practice is very likely to continue from big players as lead to oligopolistic structures, which impact freight rates and intense competition.
Vessel supply continuing to keep ahead of the current buoyant demand. So far in 2018, vessel scrapping only reached 13 ships for 24, 700 TEUs and there is little incentive to offload further vessels in the coming months, Alphaliner stated.
The carriers have not endorsed new technological systems in their operational activities. This practice will probably continue in the next years, but industry need to keep data integrity top of mind.
A choke-point refers to a point of natural congestion along two wider and important navigable passages. Maritime choke points are naturally narrow channels of shipping having high traffic because of their strategic locations.
Some of the world’s most important corridors include the Panama Canal, the Turkish Straits, Bab-el-Mandeb Strait, the Suez Canal and the Straits of Malacca and Hormuz. Although alternative shipping routes, such as the proposed Nicaraguan Canal or the Kra Canal are currently being considered, no realistic substitutes have yet emerged.
Analyzing the world’s main shipping routes found that international trade is increasingly reliant on chokepoints, the disruption of which could disarray the supply chain. Warning signs can be a part of the solution by the side of the carriers.
Source: The Maritime Executive