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global port

Global container port demand rising

Drewry’s latest five-year global container port demand forecast is 4.3% per annum, up from last year.

The maritime consultancy made the announcement in its summary of the key trends and developments in the global container port and terminal industry.

Projected port capacity expansion is 2.7% per annum, so average utilisation levels will rise, said Drewry.

Neil Davidson, senior analyst ports and terminals at Drewry, pointed out, however, that there is a strong focus on optimisation of existing facilities as opposed to building new ones and that terminal operators are focusing on cost control and efficiency to maintain project margins.

Drewry’s latest assessment of port throughput indices showed that the global index fell in September 2017 but was 10 points up on September 2016 and 12 points up on 2015.

Mr Davidson said that the growth rate in 2017 showed a sustained upward trend.

North America and Latin America showed the highest annual increases, 12.6 and 11.1 respectively, while Europe had the lowest increase at 4.4%.

The top five global terminal operators were calculated as being PSA International, Hutchinson Ports, DP World, APM Terminals and China Cosco Shipping.

According to BIMCO, the worlds largest international shipping association, container shipping has shown strong growth forecasts supported by equal demand so far this year, 

Source: Port Strategy / Port Technology

emissions

Shipping emissions to be halved by 2050

Following on from our earlier article concerning shipping emissions, over 170 countries reached agreement on Friday (13 April) to reduce CO2 emissions from shipping by “at least” 50% on 2008 levels by 2050, ending years of slow progress.

Despite opposition from nations including Brazil, Saudi Arabia and the US, the states came to a final agreement on Friday, signalling to industry that a switch away from fossil fuels is fast approaching.

Ultimately the goal is for shipping’s greenhouse gas emission to be reduced to zero by the middle of the century, with most newly built ships running without fossil fuels by the 2030s.

Kitack Lim, Secretary-General of the International Maritime Organisation (IMO), said the adoption of the initial strategy “would allow future IMO work on climate change to be rooted in a solid basis”.

The compromise plan to halve shipping emissions by 2050 leaves the door open to deeper cuts in the future, placing a strong emphasis on scaling up action to 100% by mid-century.

“Meeting this target means that in the 2030s most newly built ocean-going vessels will run on zero carbon renewable fuels. Ships, which transport over 80% of global trade, will become free from fossil fuels by then,” the European Climate Foundation said in a statement.

European Union countries, along with the Marshall Islands, the world’s second-biggest ship registry, had supported a goal of cutting emissions by 70 to 100% by 2050, compared with 2008 levels.

But opposition from some countries – including the United States, Saudi Arabia, Brazil and Panama – limited what could be achieved at the IMO session last week in London.

In Brussels, the European Commission hailed the deal as “a significant step forward” in the global effort to tackle climate change.

“The shipping sector must contribute its fair share to the goals of the Paris Agreement,” said EU Transport Commissioner Violeta Bulc and her colleague in charge of Energy and Climate Action, Miguel Arias Cañete.

While the EU had sought a higher level of ambition, the Commission said the deal was “a good starting point that will allow for further review and improvements over time”.

Shipping currently represents 2-3% of global CO2 emissions and could reach 10% by 2050 if no action is taken, the Commission reminded.

Dr Tristan Smith, an energy and shipping reader at the UCL Energy Institute, said that the 2050 target is likely to be tightened even further in the future.

“Even with the lowest level of ambition, the shipping industry will require rapid technological changes to produce zero-emission ships, moving from fossil fuels, to a combination of electricity (batteries), renewable fuels derived from hydrogen, and potentially bioenergy,” he said.

While he admitted that such changes are “massive” for a global industry with over 50,000 ships trading internationally, Smith said these reductions can be achieved “with the correct level of investment and better regulation”.

“What happens next is crucial,” said John Maggs, president of the Clean Shipping Coalition and senior policy advisor at Seas At Risk, an umbrella organisation of environmental NGOs.

“The IMO must move swiftly to introduce measures that will cut emissions deeply and quickly in the short-term. Without these the goals of the Paris agreement will remain out of reach,” he warned.

According to the text produced by the IMO working group submitted to member states, the initial strategy would not be legally binding for member states.

A final IMO plan is not expected until 2023.

Source: Edie.net / Independent 

One Manato

ONE’s very first container ship, ONE Manato has launched in Japan

The first magenta containership of the Japanese merged containership business, Ocean Network Express (ONE), has been launched at Imabari Shipbuilding in Japan.

The 14,000 TEU ship is named ONE Manato and will now undergo final touches before it gets delivered in December 2018, data from VesselsValue shows.

It is the first tailor-made boxship for the company, featuring the magenta livery and ONE logo on its hull, as the current fleet is comprised of a combination of container vessels that have been serving the Japanese trio respectively.

ONE, a joint venture between Japanese carriers K Line, MOL and NYK, worth USD 3 billion, launched its container shipping business on April 1.

The JV has been described as the world’s sixth-largest container shipping line with 230 vessels in its fleet totalling 1.44 million TEUs.

The network includes a total of 85 services, calling at over 200 ports in 100 countries.

Source: World Maritime News

emissions

Can shipping slash emissions?

Next week, countries are supposed to finalise a deal on limiting greenhouse gas (GHG) emissions from international shipping.

The International Maritime Organisation (IMO) environment meeting in London is expected to set a concrete target for shipping emissions in the coming decades. After the Paris Agreement and a deal on emissions from International Aviation, shipping is the last sector to contribute to global climate action.

A climate shipping deal has been long in the making. The IMO first adopted a resolution on GHG emissions in 1997.  However talks have stalled. There are several issues to overcome. There is concern that the impacts of any deal will fall disproportionately on flag states with many ships registered. Just six flag states – Panama, China, Liberia, the Marshall Islands, Singapore and Malta – account for over half of global shipping CO2 emissions.

However, there is concern that there is not yet enough data on ship emissions to consider setting a global target, or that shipping does not have the technical means to decarbonise.

the IMO adopted two technical measures on energy efficiency in 2011 and will require ships to report on their fuel consumption from 2019, no overall cap or reduction on shipping emissions has been set.

EU member states, including the UK, have supported a “70-100%” reduction on 2008 emissions by 2050, and a 90% reductions in the carbon intensity of shipping.

Japan has proposed that emissions be cut to 50% below 2008 levels by 2060, along with a 40% improvement in ships’ fuel efficiency by 2030. Japan also includes the idea of “amendments” to the goal, pending an IMO review of its achievability at a later date.

The International Chamber of Shipping (ICS) and other trade groups have proposed simply capping shipping emissions at 2008 levels, along with a 50% efficiency improvement by 2050. A group of low-ambition countries, including Argentina, Brazil, China and Turkey, argue against any absolute emissions cap, saying it could result in carbon leakage to other transport modes such as rail and air.

The shipping industry emitted 932 million tonnes of CO2 in 2015, according to a recent report from the International Council on Clean Transportation (ICCT). This corresponded to around 2.6% of global energy-related CO2 emissions, up from around 2.2% in 2012.

The IMO’s most recent study on international shipping emissions estimated they could grow between 50% and 250% by 2050, under current measures. As other sectors are set to decarbonise, this means shipping could grow to represent an ever larger portion of global emissions if not cap is set.

According to Green Peace, Ships carry over 80% of world trade, using vessels that operate on marine fuels which are cheaper but dirtier than road transport diesel fuels.

If the shipping sector were a country, it would rank sixth in the list of carbon emitters, just above Germany. The sector’s emissions have been growing three times faster than global emissions and if left unchecked emissions could grow by 50-250% by 2050.

Source: Carbon Brief / Green Peace 

karachi collision

An investigation has been launched into the collision of 2 container ships at Karachi port

The Karachi Port Trust (KPT) has ordered investigations into the collision between two container ships that took place at the Karachi port this week.

The incident occurred on Monday at a private terminal – South Asia Pakistan Terminals – affiliated to Karachi Port when a cargo ship during berthing slightly hit an anchored cargo ship.

The collision was captured on film by a dock worker, and video showed a Hapag-Lloyd ship, the Tolten, clipping a stationary ship while pulling into port in the Pakistan capital.

The Tolten was reportedly carrying  8,000-containers when it collided with the anchored cargo ship carrying 6,350 containers.

The footage showed containers bobbing around the harbour, while another sank. Over 20 containers fell into the sea after the collision causing loss of millions of rupees.

After the incident, transportation of containers was suspended for a few hours, before being restored at night.

A special operation to pull out the fallen containers from the sea was underway with the help of Pakistan Navy. Sources said that the operation would take at least two to three days to be completed.

According to a statement from Port Technology,  Hapag-Lloyd said they regretted the incident and would investigate how it happened.

“We have ascertained on-site that no-one was injured as a result of the incident, and that there has been absolutely no environmental pollution,” the statement said.

“There is yet to be a definitive explanation for this incident.”

To watch the video please go here

*Source: The News/ ABC /

calm sea

Calmer seas for world Shipping in 2018

The 2018 marine forecast for transpacific and other major shipping trade routes notes that full recovery depends on a number of political, economic and technological factors.

China is also a concern.  “I know analysts have been harping on about it for years,” said Transport Intelligence Ltd. economist David Buckby, “but I think given what the Chinese government has said following the 19th [Communist] Party congress – that it will be switching focus from meeting long-run economic growth targets to other objectives – coupled with recent comments on trying to manage down debt, there is a real chance that Chinese growth will stutter.”

Buckby said the slowdown might not occur in 2018, but it will likely happen over the next few years.

“As the linchpin of so many global supply chains, what affects China is going to impact the rest of the world. I don’t know exactly when that’s coming, but when it does, I think it will adversely impact global port volumes quite significantly.”

McKinsey & Co.’s Container Shipping: The Next 50 Years also points to warning signs about China’s retooled economic development model. It estimates that the swing away from exports of goods to a model based on consumption and services has coincided with a drop in China’s real gross domestic product to between 6% and 7% from more than 10%.

Asia, and China especially, are major containerised-shipping drivers. Asia accounted for 64% of the world’s container throughput in 2016, and McKinsey notes that China imported and exported 52 million 20-foot equivalent units (TEUs) in 2015 compared with 13 million in 2000. It also maintained that China’s dramatic growth and the resultant boom in container trade over the past three decades is unlikely to be repeated elsewhere in the world.

But John Murnane, a partner in McKinsey’s travel, transport and logistics practice, noted in an email response to Business in Vancouver that in the near term, continued growth in container-shipping demand is likely.

“The U.S. and Canada continue to grow strongly, and volumes in 2017 outpaced expectations. This is good news for all ports and terminals. We expect 2018 to continue this strong volume growth.”

Oxford Economics agrees. The U.K.-based economic research company raised its global GDP growth forecast to 3.2% in 2018 from 2.9% in 2017 based on what it sees as a continuing strong performance of the world economy and positive “omens for 2018.” Its December 4 global outlook research briefing pointed to four key reasons for that optimism: strong trade growth, low inflation, robust emerging markets and resilience to political uncertainty.

In a November brief, it also revised its world trade forecast up 0.5 percentage points to 4.2%.

Oxford Economics’ forecast for Canada predicts that exports will rise 2.9% in 2017 and 4% in 2018. It sees imports up 3.7% in 2017 and 2.4% in 2018, but Canada’s GDP growth slipping to 2.1% in 2018 from 3% in 2017.

The International Monetary Fund’s World Economic Outlook, meanwhile, projects global economic growth of 3.6% for 2017 and 3.7% in 2018.

In its 2017 nine-month financials, Hapag-Lloyd (ETR:HLAG), the world’s fifth-largest ocean container company, noted that global container-shipping volume from 2018 through to 2021 is projected to increase between 4.8% and 5.1%.

The United Nations Conference on Trade and Development’s Review of Maritime Transport 2017, meanwhile, pointed to CETA and the economic partnership agreement concluded between Japan and the EU in July as positive developments for global trade and shipping. It added that the growth of cross-border e-commerce could also drive long-term container-shipping demand.

However, it noted that a sustained recovery will require a strong commitment to “coherent and co-ordinated multilateral policies.” It also red-flagged the growing cybersecurity threats to world shipping supply chains.

While Buckby agreed that CETA will benefit port volumes, he doubted that it would significantly increase cargo through Vancouver and other Canadian ports.

“The dirty secret of many free-trade deals is that they don’t tend to have a substantial economic impact, especially if they just address tariffs, which tend to be low anyway, and don’t focus much on breaking down non-tariff barriers.”

Buckby added that port volumes would drop if NAFTA collapses.“And even if it is successfully renegotiated, supply chains still face disruption, thanks to possible changes to rules of origin.”

The newly widened Panama Canal has also opened the way for larger transpacific ships to reach East Coast ports directly. Infrastructure and operations in those ports consequently face similar pressures.

Port productivity suffers because a mega-container ship can take up to five days to unload. “Some ports are rising to the challenge and investing, but smaller ports and constrained ports risk losing some mainline services.”

Source: Hellenic Shipping News

london gateway

Changes to the London Gateway network

London Gateway is to lose one of its Asia-Europe services next year after THE Alliance partners unveiled their network plans for 2018.

The five Asia-North Europe services will remain largely unchanged, other than in the UK where one call has been switched from London Gateway to Southampton.

Hamburg and Rotterdam will both retain five weekly calls and Antwerp three, while Southampton will gain one weekly call to make four a week – although there have been reports from hauliers about growing congestion at the port over the course of the past year.

The Gateway will next year boast an extra call, as it is now included in four of THE Alliance’s five transatlantic services between North America and North Europe.  There may also be other changes globally for THE Alliance’s network next year, as the schedule published today revealed it has yet to decide on a South-east Asia hub.

Currently, the five carriers – Hapag-Lloyd, Yang Ming, K Line, NYK and MOL – use Singapore as their main transhipment hub in the region, but the reluctance to identify an actual port other than  the reference to a “South-east Asia hub” suggests that the partners are continuing negotiations with other possible ports. The loss of CMA CGM volumes from Port Klang to Singapore would make the Malaysian hub an obvious candidate.

The grouping’s transpacific and Asia-US east coast services have also remained largely unchanged, although there appears to be an opportunity for one of the North-west Pacific ports of Vancouver, Prince Rupert or Seattle-Tacoma to win an extra service, given that an unnamed “Pacific North-west” call has included on its PS8 service at the expense of Oakland.

However, the number of services provided by THE Alliance globally is set to increase from 32 to 33 from next April, with the addition of a second deepsea service between Asia and the Middle East – the AGX2, which will feature direct calls at the Iraqi port of Umm Qasr and the newly opened Hamad terminal in Qatar. This service will also include two direct calls at Dubai.

Source: The Loadstar

global

What does the 2020 Global Sulphur emissions policy mean in practise?

In little more than 2 years shipping will have to shift to low sulphur fuel. The International Maritime Organisation (IMO) has set a global limit for sulphur in fuel oil used on board ships of 0.50% m/m (mass by mass) from 1 January 2020. This will significantly reduce the amount of sulphur oxide emanating from ships and should have major health and environmental benefits for the world, particularly for populations living close to ports and coasts. 

IMO has been working to reduce harmful impacts of shipping on the environment since the 1960s and the regulations for the Prevention of Air Pollution from Ships seek to control airborne emissions from ships (sulphur oxides (SOx), nitrogen oxides (NOx), ozone depleting substances (ODS), volatile organic compounds (VOC) and shipboard incineration) and their contribution to local and global air pollution, human health issues and environmental problems.

Under the new global cap, ships will have to use fuel oil on board with a sulphur content of no more than 0.50% m/m, against the current limit of 3.50%, which has been in effect since 1 January 2012.

The interpretation of “fuel oil used on board” includes use in main and auxiliary engines and boilers.

Exemptions are provided for situations involving the safety of the ship or saving life at sea, or if a ship or its equipment is damaged.

Another exemption allows for a ship to conduct trials for the development of ship emission reduction and control technologies and engine design programmes. This would require a special permit from the Administration(s) (flag State(s)).

Ships can meet the requirement by using low-sulphur compliant fuel oil.

An increasing number of ships are also using gas as a fuel as when ignited it leads to negligible sulphur oxide emissions. This has been recognised in the development by IMO of the International Code for Ships using Gases and other Low Flashpoint Fuels (the IGF Code), which was adopted in 2015. Another alternative fuel is methanol which is being used on some short sea services.

Ships may also meet the SOx emission requirements by using approved equivalent methods, such as exhaust gas cleaning systems or “scrubbers”, which “clean” the emissions before they are released into the atmosphere.

Last month, an ExxonMobil survey highlighted an ongoing sense of confusion and a lack of preparedness, with 70% of respondents saying that they do not believe that the industry is ready for the deadline, when a global limit of 0.5% sulphur will be imposed on marine fuel for vessels trading internationally.

The survey suggests that only 500 ships have been equipped with scrubbers. There has been something of a backlash against scrubber technology, most notably from Maersk and Klaveness, who have said they see the technology as being expensive and immature.

Other respondents to the ExxonMobil survey said they were concerned that shipping companies would cheat and falsify the sulphur content of their marine fuel.

what mix of fuels will be available in 2020 and at what cost for each type? Refiners have not been so forthcoming with information about what new capacity they are adding to deal with the expected rise in demand. If ship operators do switch to gasoil, they will have to compete with truck drivers and SUV owners to buy the fuel, which could drive up prices and possibly lead to shortages in supply.

Meanwhile, there will be a loophole for shipowners in 2020: vessels will be permitted to sail without compliant fuel if none is available, even if they do not have scrubbers installed.

Panos Zachariadis – Technical Director at Atlantic Bulk Carriers Management Ltd doesn’t believe that the industry is ready either.

“The industry is not ready. And by “industry” I mean mostly the fuel producers, by their own admission. That is the main problem. There were two studies submitted to IMO, one by “industry” including refiners.  Industry said there will be no fuel available by 2020 even if we started preparations and the required investments yesterday. In addition a submission by ISO cautioned about the danger of “designer” fuels.  These were simply ignored.  The majority of IMO member-states wanted favourable news headlines for various reasons (to show the EU that they take action etc). It was a “political” decision.  We have seen before what happens when facts are ignored and political decisions are taken (remember Ballast Water Treatment?)

In short I expect a mess and I’ll be very surprised if this goes smoothly and on schedule.  One possibility I see is that, come 2019, IMO will have to face reality (not enough availability of safe fuel) and re-examine the application date.  One other – unfortunate – possibility is that, since MDO cannot be available in such quantities, untested “designer” fuels will be introduced to fill the void.  Current experience with hybrid (desulfurised) fuels is not good; they are very unstable.  But a further fear is that inappropriate blends may also appear pausing a safety threat!  ISO in its submission to IMO warned that cutting heavy fuel with e.g. naptha may show acceptable flash point limit but still may be explosive!  And there will be no ISO or other quality standards for such “designer” fuels by 2020.”

It seems apparent that the information regarding the switch is causing uncertainty with regards to what the choices will be to make sure that ships are properly equipped to deal with the change. It could be a case that companies are waiting for their competitors to go first so that they can then make an informed decision on the best way to go, but with little over 2 years to go this seems a difficult strategy.  Compliance seems to be something of a grey area, but companies should by now have plans in place to make sure that as of 1st January 2020 they are ready to go.

Sources:

Hellinic Shipping News

Green 4 sea.com

Iims.org

Imo.org

digital age

Can container shipping reinvent for the digital age?

In 1967, the British Transport Docks Board (BTDB) commissioned McKinsey & Company to assess the impact of a recent development from the United States: container boxes. The first purpose built ships for them were being launched, and a few US lines were carrying these novelties on their regular service. 

McKinsey & Company predicted:

Containerised cargo is effectively becoming homogenous, like other bulk cargoes, and is subject to the same economies of scale. Economics of scale will result in this concentrated cargo being handled by a small number of large organisations. Efficient use of expensive containers will require extensive route networks under unified control to allow load balancing.”

Now that standardised containers have been introduced in the shipping industry, the rush to ‘get on the bandwagon’ will probably lead to substantial overexpansion.

If container ships follow the tanker trend, ships of more than 10,000-container capacity could be available.

Feeder services will tend to replace direct calls when the large container ships come into service.

Rotterdam is an example of a European port which is in a good position to fill a major transoceanic role.

The role of British ports may tend to become that of feeders to the Continent…. Proximity of British East Coast ports to Europe will dictate their use.

In their October 2017 report they posed the question: In 1967, containers were disrupting the shipping business, so the players had to rethink everything. Now it’s digital, big data, and the Internet of Things. Is it time to rethink everything again? 

In 1956, the first ship to transport containers, named the Ideal X, carried only 58 of them. Since then, container-ship capacity has grown 370-fold: today’s largest vessels can hold more than 20,000 TEUs. Larger vessels provide greater cost efficiencies in fuel and crews, reduce greenhouse-gas emissions per container, and enable hub-and-spoke network strategies. Moreover, as operators collaborate in alliances, putting a single large vessel instead of two small ones on a given route has its advantages.

So, how much longer will this trend toward growth in capacity continue? In the long term, three factors could limit it.

The first is that returns to scale decline with increasing size, so a move from 20,000 to 40,000 TEUs wouldn’t reduce unit costs as much as a move from 10,000 to 20,000 TEUs.

Second, the narrowness and shallowness of some of the world’s waterways impose physical constraints: for example, the Strait of Malacca (between the Malay Peninsula and the Indonesian island of Sumatra) has a minimum depth of 25 meters, the most modern channels of the Suez Canal a depth of 24 meters. The latest designs for vessels that carry 24,000 TEUs have a depth of 16 meters, which leaves scope for further growth in capacity.

Third, over the past decade, the blitz for bigger vessels has strained terminal and port operators, forcing them to invest in new cranes, dredging equipment, reinforced quay walls, and extended berths. Unloading containers from bigger ships takes longer because cranes must reach farther across vessels, thus extending berth occupancy and reducing productivity.

On balance, we do not view 20,000 TEUs as the natural end point for container ships—50,000-TEU ones are not unthinkable in the next half-century. However, progress will probably be much slower than it was in the past decade: overcapacity means that new ordering will be slower over the next five to ten years. Lower slot costs materialise only when demand fills up larger ships, which hasn’t happened recently. But if demand catches up with supply, as it may well do in the early 2020s, the logic of scale will once again drive orders for bigger and bigger ships. Nonetheless, since 40 percent of all shipyard capacity is unutilised, and it’s not conceivable that governments will allow shipyard bankruptcies on a large scale, they could find a way to prompt some level of new ordering.

The size of boxes could also increase. From the original six-foot-long Conex box the US military used in the 1950s, they have grown to 20 and now 40 feet and above. The limitation on box size is compatibility with road, rail, and other modes of transport. On US and Chinese roads, the maximum box length is 53 feet, so containers of this size are common for US domestic trade. As road networks improve and trucking becomes autonomous on major routes, we may well see containers 60 or more feet long, as well as wider and taller containers.

Wholly automated terminal and inland operations, with self-driving trucks (and perhaps even self- driving containers or “hyperloops”) transporting containers to inland distribution centres, will probably become the norm in the next couple of decades. Self-loading trucks, arriving just in time to pick up the next container without waiting or moving around unproductively at terminals, would improve the interface between ports and inland transport. Imagine a terminal with no stacks in the yard; instead, customs would pre-clear boxes digitally, and autonomous trucks would take them straight from ships and out to customers.

Advances in the use of data and analytics will bring further step changes in productivity. Shipping companies could heed the example of today’s state- of-the-art aircraft, which generate up to a terabyte of data per flight. Coupled with the introduction of more sensors, the better usage of the data that ships and containers generate would allow enhancements such as optimising voyages in real time (by taking into account weather, currents, traffic, and other external factors), smarter stowage and terminal operations, and predictive maintenance. Data could also improve the coordination of arrivals at port—a major benefit, since 48 per- cent of container ships arrive more than 12 hours behind schedule, thus wasting the carriers’ fuel and underutilising the terminal operators’ labor and quay space.

Data can create additional value for customers too. Full transparency on shipments, from one end of the value chain to the other, would be an enormous boon to carriers, forwarders, and shippers alike, giving them access to real-time information and enabling them to predict a container’s availability, arrival times, and so forth. Some ports (such as Antwerp, Hamburg, and Singapore) are already starting to share information in real time across data ecosystems, which could eventually extend throughout the whole industry. That would create a truly integrated end-to-end flow of containers and therefore make the industry more productive by reducing handovers, waiting times, and unnecessary handling.

A data-enabled shipping industry could also support its customers’ supply chains in important ways— but that will require a truly new order of performance and efficiency. The real-time visibility of all container movements, reliable forecasts, and integrated flow management will pave the way for flexible, dynamic supply chains that all but eliminate waiting times and inefficiencies. This achievement will be especially beneficial for industries (such as automotive) that have increasingly complex supply chains or for those with special needs (suchas cold chains). It will also allow smart logistics providers to differentiate themselves and earn premiums. But these opportunities won’t appeal to all customers; other sectors will demand only basic logistics services at the lowest possible cost.

By 2067, we believe shipping will have some or all of these characteristics: 

Autonomous 50,000-TEU ships will plow the seas—perhaps alongside modular, dronelike floating containers—in a world where the volume of container trade is anything from two to five times greater than it is today.

Short-haul intraregional traffic will increase as manufacturing footprints disperse more widely because of converging global incomes and the increasing use of automation and robotics. Container flows within the Far East will continue to be huge, and the secondmost significant trade lane may link that region to Africa, with a stopover in South Asia.

After multiple value-destroying cycles of overcapacity and consolidation, three or four major container-shipping companies might emerge. These businesses could be either digitally enabled independents with a strong customer orientation and innovative commercial practices or small subsidiaries of tech giants seamlessly blending the digital and physical realms. Freight forwarding as a stand- alone business will be virtually extinct, since digital interactions will have reduced the need for intermediaries to manage logistics services for multiple participants in the value chain. Across the industry, all winners will have fully digitised their customer interactions and operating systems and will be closely connected via data ecosystems.

A fully autonomous transport chain will extend from initial loading, stowage, and sailing all the way to unloading directly into autonomous trains and trucks and drone-enabled last- mile deliveries.

The needs of customers will diverge: some will expect their shippers to be fully integrated into their supply chains—and be willing to pay a premium for that—while others continue to demand sea freight at the lowest possible cost. Both sets of customers will expect transparency and reliability to be the norm, not the exception.

What therefore has to be done to move shipping and containerisation further into the digital age?

First, invest in digital, which is the main way to differentiate products, disintermediate value chains, improve customer service, raise productivity, and cut costs. The risk is that tech giants and would-be digital disruptors will move faster than incumbents and capture most of the value from customer relationships.

Second, think about consolidation: the industry’s natural end game may involve fewer, larger operators. The past few decades of explosive trade growth created an environment that could sustain many players. Now that growth has slowed, the industry must rationalise overcapacity. Although some companies and investors could be candidates to lead the next wave of consolidation, becoming a target may sometimes be better for shareholders than struggling to be the winner at any cost. McKinsey research shows that from 2000 to 2015, in a range of industries, the value from deals was nine percentage points higher for average target companies than for average acquirers.21

Third, integrate. Some next-generation innovations now on the drawing board require careful orchestration across the value chain. Carriers and terminal operators share a particularly rich agenda: bigger vessels paired with investments in infrastructure for terminals, complete transparency on ship arrivals and berthing (thanks to geospatial analytics), and larger containers. Integrated logistics providers could make today’s freight forwarders largely irrelevant by mastering the complexity and the customer interface.

Fourth, be bold. The shipping industry has been built on the vision of audacious leaders with the per- severance to sail through the storms. It now faces a wave of digital disruption. The ability to convey a sense of purpose for employees, to create optimism about the journey ahead, and to maintain a steady course will be the hallmarks of the leaders shaping the industry for the next.

McKinsey and Company’s 1967 predictions were on point, so their analysis of the next 50 years of evolvement cannot be ignored. These changes seem massive and unachievable at the moment, but that would have been the case 50 years ago as well, and the industry is unrecognisable from then.  It is exciting to watch what the next years have in store, and the advances that can be made to make sure that shipping does truly come alive during the digital age.

To view the full report please go here, where you can download the full report at the bottom of the page.

container port

August was an all time high for container ports

August’s Drewry global container port throughput index reached an all-time high of 126.8 points.

The August figure, the highest since inception of the index in January 2012, was nearly 7 points up on August 2016 (120.0 points) and more than 11 points up on the August 2015 level of around 116 points.

The global index climbed 0.5% from July’s figure of 126.2.

The month-on-month index figures for China and Europe dropped 0.5% in August – totalling 136.1 (down from 136.8) and 114.2 (down from 114.7) respectively, but show more than 5% annual increase.

All regions showed at least 5% annual growth in August 2017. However, 2016 was a weak comparison in many cases, said Drewry.

It added that Africa – with 117.4 points in August, up from 102.7 in August 2016 (107.2 in July 2017) – is showing double digit annual growth. It pointed out, however, that the sample size is small.

North America showed the highest annual change of 7.0%, with 137.7 points, up from 128.7 in August 2016.

Its monthly change of 2.8% is equal to Latin America, which jumped from 110.4 points in July 2017 to 113.5 in August.

Latin America saw the third highest annual change of 6.1%, with 107.0 points in August 2016.

The Drewry Container Port Throughput Indices are a series of volume growth/decline indices based on monthly throughput data for a sample of over 220 ports worldwide, representing over 75% of global volumes.

The Container Throughput Index of the RWI – Leibniz Institute for Economic Research and the ISL – Institute of Shipping Economics and Logistics showed a further substantial increase in September 2017 from 128.5 to 129.7 (revised figures). Compared to the beginning of 2017 it gained almost six points. A similarly strong plus was last achieved in 2010.

The index is based on data continuously collected from world container ports by ISL as part of its market monitoring. Because large parts of international merchandise trade are transported by ship, the development of port handling is a good indicator for world trade.

As many ports release information about their activities only two weeks after the end of the respective month, the RWI/ISL Container Throughput Index is a reliable early indicator for the development of international merchandise trade and hence for the activity of the global economy. Together, the 82 ports covered in the index account for about six out of ten containers handled worldwide. The flash estimate for September is based on data reported by 45 ports, accounting for close to 80% of the total index volume.

The RWI/ISL-Container Throughput Index for October 2017 will be released on 21 November 2017.

•Source ISL / Port Strategy