- Predicted rise in containerized shipping volumes.
- Global trade dynamics are labeled as “globalization with regionalization.”
- Carriers to learn from the profitability models of logistics companies.
Former chairman Bronson Hsieh criticized container shipping CEOs for overordering ships, leading to an excess in global box shipping capacity. Despite the predicted rise in containerized shipping volumes, he foresees tough times ahead for shipping companies due to an overwhelming 9.1% increase in capacity, reports The Load Star.
Reconsidering Vessel Types
Hsieh suggests a shift in vessel size, emphasizing the need for smaller ships. With global manufacturing diversifying across Central America, South Asia, and Southeast Asia, he believes deploying massive vessels efficiently might become challenging.
Changing Global Trade Dynamics
As manufacturing spreads to various regions, Hsieh anticipates a shift in global trade dynamics labeled as “globalization with regionalization.” This implies that investing in massive vessels might not be wise, given the gradual relocation of cargo away from China.
Value in Logistics Services
Hsieh praises carriers investing in end-to-end logistics services as a more viable strategy than solely relying on port-to-port service revenues and heavy asset investments. He highlights the success of carriers investing in warehouses, trucking companies, consolidation businesses, and logistics capacity.
Learning from Logistics Providers
Comparing shipping carriers to logistics service providers, Hsieh notes that while carriers invest heavily in assets, they don’t always yield similar profits as logistics service providers. He emphasizes the need for carriers to learn from the profitability models of logistics companies.
Did you subscribe to our daily newsletter?
It’s Free! Click here to Subscribe
source: Loadstar
