Five Global Shipping Trends to Watch in 2018

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Overall, 2017 was a good year for the ocean shipping industry. Operating margins for most carriers improved, driven by robust demand, positive inventory developments and higher rate levels. Will the positive recovery continue? Or will the vicious cycle we’ve experienced since 2008 continue, where carriers are truly profitable for only three to four years at a time?

Industry watchers remember all too well the chaos of the Hanjin bankruptcy in 2016 and the aftermath: fully loaded ships in limbo and supply chains in disarray. With this as backdrop, carrier activities remain high on the list of trends to watch and consider in 2018. Let’s look at five global carrier trends we will see this year.

Carrier consolidation

Most people think carrier consolidation reached its peak in 2017, but consolidations will likely continue. A few carriers are rumored to be heavy targets of consolidation. When analyzing their capacity and order books, it seems likely we’ll see some activity in late 2018. Also, several carriers who remain outside of the broader alliances are likely to evaluate their service strings and loading factors, then slot charter agreements and work with other carriers to keep up with what’s happening in the market.

Carrier alliances

It’s very likely the alliances we know today (2M+HMM, The Alliance, Ocean Alliance) will change. As carrier consolidations occur in 2018, one carrier could easily make a move on a carrier in another alliance, which would alter the entire alliance landscape. Similar shakeups impacted the market in 2015. Back then, the G6 alliance had six different cargo interests on one vessel, all of which may have had varying terminal and intermodal interests.

When it was time for intermodal moves, the rail lines had to deal with six different shipping lines. The carrier alliances further complicated train loading priorities given their various interests. Worse, alliance members operated multiple terminal interests within a port, so containers discharging from a single ship and the chassis may have had to be returned to different terminals.

All of this exacerbates congestion, delays and financial burden. Today, evolving carrier alliances could discontinue schedules, disrupting shippers’ plans, although changes of this sort will likely draw out until after many contracts expire. Still, companies must carefully choose carrier options that cut across alliances to protect their interests.

Over capacity

COSCO, Evergreen, CMA CGM and OOCL are scheduled to add significant capacity in 2018. These larger class vessels will likely operate in the Asia to Europe trade. Yet, as in the past, adding capacity in one lane can impact other lanes and impact rate stability in those lanes, especially if overall demand falls behind available capacity.

The industry continues to scrap vessels below 20 years at an all-time low, and realized capacity continues to expand exponentially, something the industry wrestles with every year. Carriers have been removing capacity through blank sailings to stabilize supply and demand and preserve rate levels, and they may do more of it to stabilize a declining market.


Even with rapid employment of technology in the last few years, our industry has not seen meaningful transformation. Almost half of bookings are still manual, and as many as half of all invoices contain errors. These basic and fundamental areas of our business need improvement. And, after the Maersk cyber security attack in 2017, the industry needs to keep data integrity top of mind.

Choke points

Many issues continue to rise once vessels arrive at ports, including terminal congestion, conflicting interests within terminals, rail delays, chassis shortages and labor volatilities. All can cause delays at last mile delivery points. There are some warning signs that shippers can watch for by constantly reviewing performances at the terminals and listening to feedback from dray carriers and chassis providers. The more diverse a shipper’s routings are, the easier it will be to navigate around choke points once alarms are raised.

Overall, global shipping in 2018 will be relatively similar to 2017. As carriers jockey for market share, there could be rate volatilities. Some shippers will benefit, but service may suffer for others, especially for those who are trying to carry the right amount of inventory and who therefore find it difficult to cope if there are delays.

In our own business, we expect another trend from 2017 to continue into 2018. Shippers are likely to try to move away from long-term, fixed pricing structures and to press for more creative pricing options as volatility continues.