This year, many carriers are focusing on profitability as opposed to ensuring that vessels are full. With smart business tactics in play, carriers are attempting to ensure that financials are steady due to the effect of many of those going out of business in the last few years.
There are many factors that would affect ocean shipping, and in 2019, the likes of supply and demand play a big role. Unlike past years, there was a simple correlation that if there was a spike in demand, there would also be a spike in shipping rates; if demand dropped, then shipping rates would decrease. This occurred regardless of whether it was profitable for the carrier. However, with fewer carriers in play, many vessels are committed to maintaining a tight ship with reducing the available capacity to make sure that demand is present against such available capacity. This has resulted in average shipping rates being maintained at a higher rate, with overall capacity for ocean shipping in 2019 projected to increase at least by 3%.
Politics and government policies, trade and tariff uncertainties can also affect ocean shipping in 2019, as much as it did in 2018. With the trade war between China and America in 2018 led to many changes in how importers/exporters dealt with ocean shipping. Southeast Asia has encountered many importers moving towards supply chain diversification, along with increase in use of transshipments along with the base ports. The following is a summary of the US- China trade war.
Despite demand in Southeast Asia increasing, carriers are not looking to increase their services, which may change the way in which carrier operations will occur. Don’t forget the Brexit also looms, and that in hand, will affect ocean shipping in some way too.
Ocean carrier consolidation and the use of 3PLs (also known as third party logistics providers), with various carriers re-strategizing the way they operate. One of which is to either invest in the use of 3PLs. Another factory that would affect ocean shipping in 2019 would be the use of ocean shipping technology, to reduce manually entered invoices and information.