Chapter 4: Findings and Discussions
In the first section of this chapter, the interview result is being analysed. Following that, the research done in phase 1 and the interview results gathering in phase 2 is combined to formulate the Opportunities, threats and uncertainties in Intra-Asia container trade. Finally in the last section of this chapter, we will forecast the future outlook of Intra-Asia for the next five years.
4.1 Analysis of Intra-Asia Market
We had tailored our interview questions to gather professional opinions on the future outlook of Intra-Asia and Intra-Asia container shipping and how they could impact and affect the ship-owners and operators (Appendix D).
Based on the interviews results (Appendix E) we had gathered, 80% of the respondents believe that the current shipping market is now in its recovery from the longest downturn in three decades in the shipping industry. It is largely due to the cause of overcapacity of ships in the market that have depressed freight rates since the end of a shipping boom in 2008 (Shipping Industry sees an end to five-year downturn, 2014). The current recovery seem to be fragile in Europe, though it is gaining traction in the US and UK, while emerging market is showing signs of slow growth (Howard, 2014). All the main shipping segments remain heavy on the supply side, causing great volatility in freight rates (Figure 10). Fortunately, the industry has now improved its ability to apply counter-balancing measures that had
(NSY) had been providing parts and services to the Mega-Yacht Industry since receiving their initial seed capital in 2000. The Mega-Yacht industry provided an attractive opportunity for NSY. Although the industry was small by comparison, serving only 10,000 vessels, it generated in excess of $1 billion in economic activity annually, divvied amongst the new build, and maintenance, refit and repair business sectors (Mark & Mitchell, 2003, p. 48). The industry’s supporting cast included captains and crews, owners, management companies, procurement agents, yacht builders and repair entities, brokers, and local husbanding agents. Although unknown to the firm at its inception, consultants in 2002 forecasted the mega-yacht industry would see annual growth of 6%, with the potential for even better numbers in the short-term (Mark & Mitchell, 2003, p. 48).
You are required to undertake a detailed examination of the changing nature of the long-haul transatlantic airline market. The market you are required to investigate comprises only the international passenger market (i.e. excluding the movement of goods by
- Explain the structures of the road and rail cargo industries and the current issues facing the industries.
Finally, an aging driver workforce is expected to result in driver shortages as drivers will be leaving the market at a faster rate than can be replaced by interested qualified new drivers. For these reasons, the overall transportation industry and global supply chain will be challenged as trucking is the common thread needed to complete rail, ocean and air moves. In addition to lower service levels for shippers, higher driver pay due to driver a shortage and rising transportation costs, a potential impact on the industry is a shift in focus toward driver productivity maximizing initiatives like reducing terminal/shipper dwell, improving chassis quality, or increasing number of drop pools (at the expense of container utilization). While a driver shortage should bode well for the fundamentals of intermodal (ie. fewer total truck miles) versus full OTR truck offerings, a significant driver shortage would nonetheless be a major challenge for the intermodal
Over the next decade, overall U.S. freight outlook tonnage will rise nearly 25% and revenues from that freight will surge above 70%, per the latest long-term freight forecast released by the American Trucking Association. Growth in overall freight volume is pegged at 2.8% per year from 2014 to 2019, then it tapers off to 1.0% during the next six years, through 2025, Trucking’s share of that increase will be from 69.1% in 2013 to 71.4% in 2025
There were also the existences of exporting conflicts. In 1994, an exporting consultant Hodges had identified major export problems. One of these problems is the relatively high cost, low efficiency and reliability of Australian shipping that will greatly affect the price and quality of the product. There are also problems with the availability and usage of appropriate containers for the product that again has a massive effect on the quality and on-time delivery of the products. Different countries have their own prevailing laws and standards, which an exporter should comply with. There are also trends that an exporter should successfully fulfil, like the new trend for environmental concerns. The exporter should also establish a better relationship with their traders in order to continue a regular link and easy entry to the market.
5. According to this week's readings, what aspects of cargo operations do you believe are critical in establishing a secure
The Company is prepared to compete in the market as a freight broker with an earned understanding of a freight broker’s requirements to become a valued transport service company. The initial staff will ensure the proper cost management process is in place, taking advantage of the lower overhead for the company’s operations as a vital
Ocean Carriers Inc. was approached in January of 2001 with a contract proposal for the leasing of one of their ships for a term of 3 years beginning in 2003. Ocean Carriers currently has no ship to accommodate the customer. To commission the construction of a new vessel would take 2 years from start to completion. The average rate in the spot market is $22,000 per day. Ocean Carriers deployed a younger fleet than average carriers and generally earned a 15% premium over the average daily rate placing them in position to capitalize in strong economies. However, the industry is volatile and suseptable to extremes both low and high. Many ship owners sought to sign contracts with time charters in order to shield themselves from the swings
2. Consider the idea of upgrading the Los Angeles warehouse to include a distribution center capable of processing all the volume coming into the United States. Assume that containers coming into Seattle would be inspected by federal officials (this needs to be done at all port locations) and then immediately shipped by rail in their
This drawn manufacturing enterprise moved from Hong Kong to backyard China at a relatively lower cost. Therefore, Hong Kong port turns to focus on transporting container cargo; shifting from a relay hub to a load center and enjoying its superb period till mid-1990s.
Reefer box, as known as refrigerated container, is listed in the Hanjin’ potential products list. Since reefer boxes are limited and demand for it is escalated from EU to Asia, reefer boxes are promoted inbound in Asia to export boxes to Europe. As a result, Hanjin can maximize EQ-equipment turnover. Some ports in Europe, such as Felixtowe in Great Britain, have a surplus of reefer boxes, thus the company can adjust the rate higher in order to limit the trade into such area while surplus areas, such as Barcelona in Spain, are offered a reasonable low rate to give Asia-Europe service promotions. Afterwards, the company gets higher contribution margin derives from Europe-Asia trade. Another way Hanjin reinforces its core business globally is promoting “shipper owned container”, “SOC” for short, in the area where boxes are deficit to save on empty repositioning cost. In surplus areas, Hanjin tries to be flexible with its rates to clear out the boxes and send them to other areas with high demand. The rates can be adjusted from lower to higher accordingly. Hanjin Shipping, additionally, has a service diversification to Africa as NAF-North Africa-Asia, WAF-West Africa, EAF-East Africa, SAF-South Africa lines are added. Before cargos are
This essay attempts to describe current air freight market conditions, challenges in air freight demand and generate potential solutions to increase air cargo demand. It is divided into four parts: air freight, current demand for air freight, challenges, and potential
Other section of buyers which may affect container line business are freight forwarders or clearing agents, with rapid expansion of shipping industry and import/
According to Waters (2010) water transport has not been used to it’s full potential therefore there has been a decline in sea transport, this is due to the lack of proper terminals. But according to Harrison & Fichtinger (2013) containerised ocean transport has become the lifeline of nearly all global supply chain, because of the increased amount of global processes, outsourcing and offshoring. Mason & Nair (2013) states that today, there are more than 80% of world trade by sea, such as raw materials and manufacturing outputs are carried inter-regionally around the globe.