In 2008-2009, shipping took a big hit. And while many trade journals are still focusing on that, we (quite easily!) dug up ten different statistics that together paint a rosy picture. The bottom line?
Slowly but surely, the market is recovering.
Over-capacity is a problem…but it’s getting better.
Smart companies are identifying great ways to cut costs.
1. High competition in 2013 was rough…but multipurpose shipping did great. And that trend should continue. Drewry expects it to grow by 5% annually in the coming years, with even more pronounced increases in 2015 and 2016.
2. Many Negative Nancys chime in about the demise of air cargo but they might not have been cc’ed on IATA’s latest update. In February, the global air cargo market shot up by 2.9% percent, meaning that since the beginning of January, air cargo volumes have risen by 3.6%. Good times!
3. Reefers are generally associated with happiness…as well they should be. Maersk’s container manufacturing department believe that reefer volumes are on the rise, predicting a 4-5% growth this year, compared to a paltry 1% growth last year.
4. It’s not just reefers either. Despite fears of over-capacity, Chinese banks are betting strong on increased capacity. And they’re putting their money where their mouth is. The Export-Import Bank of China is lending two German shipping firms $1.2 billion dollars to build Chinese vessels.
5. Strong performance is taking place around the world. Since 2005, shipping activities has contributed about $200 billion dollars to the European economy…and registered tonnage in the EU has grown by a whopping 70%.
6. The United States isn’t being left out of the party. Bucking trends from last year, intermodal rates in the US climbed for 11 out of the first 14 weeks in 2014, registering a 6.7% hike in prices since early 2014 (and 7.3% over the same rates last year).
7. Looking east shows similar results. Between 2012 and 2012, trade within the Association of Southeast Asian Nations (ASEAN) grew by a respectable 18%, a stronger increase than that showed in global commerce.
8. Going forward, alternative fuel sources, like LNG, will provide both cheaper and greener methods to move cargo. LNG is graduating from short-sea vessels, with some predicting that LNG will supply nearly a quarter of all bunker fuel supply by 2025.
9. Carriers in the world are growing more efficient, with alliances like the P3 and G6 ticking off checkmarks towards approval. Carriers are improving performance without even teaming up though. For example, Hapag-Lloyd narrowed 2013 losses by $134 million dollars, with a 156% increase in year-on-year operating costs, chalking up the success to cost-cutting measures.
10. The best part is that efficiency can come from the most surprising places. To cut costs operating nearly 100,000 trucks, UPS instituted a series of creative changes, including cutting out left turns from routes. The results? Over 10 million gallons of gas saved per year.
Is your freight business operating at full efficiency? Check out a glaring inefficiency common to all top 15 global freight forwarders that is costing them money every single day!