The normal business cycle in the trans-Pacific generally is six or seven years. The financial crisis of 2008 ignited the downtrend with such velocity that the upward recovery was equally dramatic, basically truncating the cycle into two very traumatic years for everyone involved in global logistics.
As we come out of 2010, some valuable lessons have been painfully taught to both shippers and carriers. For shippers, relationships founded on simple rate negotiations yield volatile results — extreme rate fluctuation. The need for stability and predictability will mandate the evolution to the often-used term “shipper/carrier partnership.”
Carriers need to maintain the diligent efforts to improve cost efficiency while making sound commercial decisions rather than falling back to elementary utilization fundamentals.
For both, consistency represents sustainability, and both sides are seemingly eager to work toward those goals in 2011 and beyond.
Another challenge the industry will face in 2011 will be changing of the chassis paradigm. A new chassis service structure has been initiated by new environmental demands such as cutting carbon dioxide emissions while allowing carriers to focus on their core competencies of cargo/container movement and vessel/fleet management.
All our customers would be well served by this change as this program would relieve the waste of dwell times at terminals by improving turnaround and transit times, which benefits both the customer and the carrier.
In the long term, the efficiencies gained by divesting this asset will outweigh any initial confusion and inconvenience that comes with short-term cost.