The arteries of global trade—ocean shipping—are weathering an unprecedented storm. Mergers, acquisitions, restructuring, and alliances continue to reshape the industry, forcing shippers to reconfigure their supply chain networks. This transformation represents not just an industry shakeout, but the ultimate test of service capabilities. In this turbulent environment, which carriers will emerge victorious?
Industry Upheaval: Undercurrents of Consolidation
The past year has witnessed staggering consolidation in global shipping. The bankruptcy of Hanjin Shipping served as a wake-up call for the entire industry. Patrick Burnson, executive editor with two decades of shipping market experience, noted: "When Hanjin declared bankruptcy and abandoned vessels at ports worldwide last year, it seemed like shippers' worst nightmare. We all hoped order would emerge from chaos and normalcy would return. Reality may prove otherwise."
Industry analysts predict the number of major international carriers could shrink to single digits. Martin Dixon, Research Products Director at Drewry Maritime Trade Advisors, suggests that despite massive consolidation, fleet adjustments, and scrapping, 2017 and 2018 will remain challenging for global freight. "By 2019, with stronger orders and easing supply pressure, the industry may emerge from its super-cycle trough," Dixon said. "While aggressive consolidation responds to market ills and is positive, it alone isn't salvation." He cautioned that despite strong freight rate rebounds in late 2016, ocean shippers should prepare for 20-40% contract rate increases in the coming year.
Service Excellence: Leaders in Turbulent Times
Despite industry turmoil, Logistics Management readers have identified twelve carriers delivering world-class service. TOTE Maritime Alaska topped the rankings with 47.26 points overall, earning highest marks in value (11.39) and customer service (9.85). Orient Overseas Container Line (OOCL) scored 11.06 for on-time performance, while NYK led in information technology (7.86). Matson excelled in equipment and operations (9.93).
TOTE Maritime Alaska: Customer-Centric Value Creation
TOTE's success stems from deep customer understanding and value creation commitment. Beyond reliable transport, it provides customized solutions to optimize supply chains and reduce costs. Key strengths include:
- Flexible shipping options including FCL, LCL, and refrigerated transport
- Advanced IT systems for real-time cargo tracking
- Experienced customer service teams providing comprehensive support
OOCL: Benchmark for On-Time Performance
OOCL's 11.06 punctuality score reflects exceptional operations management and attention to detail. Critical factors include:
- Precision route planning minimizing transit times
- Advanced vessel maintenance ensuring optimal performance
- Efficient port operations through global partnerships
NYK: Technology-Driven Innovation
NYK's IT leadership (7.86) stems from deploying cutting-edge technologies across operations. Key initiatives:
- Smart vessel management systems for real-time monitoring
- Extensive EDI implementation for seamless data exchange
- Online booking and tracking systems for customer convenience
Matson: Operational Excellence Standard
Matson's 9.93 equipment/operations score reflects superior asset management. Best practices include:
- Continuous investment in modern vessels and port equipment
- Rigorous maintenance protocols minimizing downtime
- Lean operations management optimizing efficiency
Future Outlook: Service Differentiation as Key Differentiator
As consolidation continues, carriers must emphasize service differentiation through:
- Enhanced customer relationship management
- Greater shipment visibility through technology
- Collaborative supply chain optimization
- Value-added services like customs clearance and warehousing
In this transformative era, only carriers delivering exceptional, customer-focused service will navigate successfully through industry turbulence.