Over the past few years, robust demand, positive inventory developments, and higher rate levels have increased most global carriers’ margins. These trends are helping the global logistics industry, but there are other trends whose impact is not so clear. Consider the following trends:
The popularity of consolidation has been increasing in recent years, and all signs point to continued growth in the future.
U.S. tariffs on Chinese products have impacted shipping trends this year, and could continue. The 301 tariffs, Lists 1 and 2, went into effect in July and August of this year, implementing 25% duty on $50B worth of Chinese goods. In addition, List 3 added a 10% duty on $200B of Chinese goods on September 24, 2018. The proposed increase on January 1, 2019 to 25% on List 3 products is currently on a 90 day hold. If no deal is reached between the U.S. and China within 90 days, then the tariffs could increase to 25% around March 1, 2019. To learn more about this trend, view our tariff webinar.
Carrier alliance shakeups
Well-known alliances like 2M+HMM and Ocean Alliance may soon be changing due to carrier consolidation. This could potentially complicate how shippers select carriers in future.
Higher capacity is driving the need for larger vessels, which will likely operate in Asian and European trade. Therefore, rates could fluctuate, and carriers could use tactics like blank sailings to stabilize supply, demand, and rate levels.
Shipping technologies like visibility and automation platforms, ecommerce, ELDs, cryptocurrencies, and digital marketplaces are being adopted across the industry. However, almost half of bookings are still made manually, so there are still fundamental areas that are awaiting logistics technology adoption.
Adapting to trends is crucial for success, so keep on top of industry shifts, and adjust your global shipping strategy accordingly.
Source: C.H. Robinson