Problems of international container transportation in logistics | Статья в журнале «Молодой ученый»

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Автор:

Рубрика: Экономика и управление

Опубликовано в Молодой учёный №35 (325) август 2020 г.

Дата публикации: 28.08.2020

Статья просмотрена: 30 раз

Библиографическое описание:

Шибанкова, А. А. Problems of international container transportation in logistics / А. А. Шибанкова. — Текст : непосредственный // Молодой ученый. — 2020. — № 35 (325). — С. 74-75. — URL: https://moluch.ru/archive/325/73349/ (дата обращения: 26.02.2021).



In the article the author reviews relevant problems in the container shipping industry that have occurred in the world over the past 3 years.

Keywords: world trade, container transportation, freight rates, market monopolization, IMO regulations.

Experts say that up to 80 % of world trade is transported by sea and processed at seaports all around the world. For the last 3–4 years, the container shipping industry has been in crisis due to the decline in global trade rates, on the one hand, and the transportation of goods by large ships, which are either not fully equipped or the regularity of their voyages is disrupted, on the other hand. Tightening regulatory constraints related to environmental change also negatively affect the container shipping industry [1].

The container transportation market in 2018 consisted of 53 % large container ships with a capacity of more than 15000 TEU, compared to 44 % at the end of 2017 and 33 % at the end of 2016. Trade on the European route from Shanghai in 2018 decreased by 6.2 % compared to 2017. Average freight rate on the Shanghai-Mediterranean route in 2018 decreased by 2.4 % compared to 2017 [2]. This can be explained not only by the decline in economic performance in European countries, but also by the economic crisis in Turkey. As economic activity weakened in regions such as Nigeria, South Africa, Argentina, Brazil, Bolivia and Venezuela, prices on the North-South routes decreased due to the import decline. Some growth in prices was on the Trans-Pacific route and the level of freight costs on the route Shanghai-U. S. West Coast reached its six-year maximum at the end of 2018 (11 % growth compared to 2017), and prices on the route Shanghai-Australia increased by 22 %. The temporary increase in business activity in maritime trade in the second half of 2018 was due to higher oil prices and slightly increased imports from China to the U. S. A. Decrease in freight rates led to a decrease in demand for large container ships and a decline in the number of voyages, which leads to irregularity of logistics routes.

In 2020, the industry faces new challenges and additional regulations. According to the new policy of the International Maritime Organization (IMO), which regulates the issues of international commercial shipping, from January 2020, the sulfur content in fuel oil should not exceed 0.5 % of the fuel mass (for comparison, in 2012 the standard was 3.5 %). This measure is intended to improve air quality in coastal port areas, which prevents global climate change [3].

The volume of demand for oil products from sea shipping accounts for 50 % of the global market. In 2017 the consumption of high-sulfur residual fuel oil (bunker fuel) was 3.5 million barrels per day. Limiting the level of sulfur oxides emissions by 7 times requires modernization of fuel used in the shipping industry. In order to comply with the new IMO requirements, carriers can switch to low-sulfur fuels (residual fuel oil or low sulfur distillates, such as marine gas oil). Low- sulfur fuel price as of April 2019 was about $ 600 — $ 700 per ton, while traditional bunker fuel oil costs $ 400 — $ 450 per ton. Increasing fuel costs will inevitably lead to higher freight rates. It is also possible to install cleaning equipment on ships to remove sulfur from the exhaust systems of marine engines, allowing the continued use of cheap fuel. However, scrubbers installation cost may amount to $2 — $10 million, their production is currently limited and cannot meet the demand. Under these conditions, the carriers will be forced to move to larger vessels and dispose of old vessels of lower tonnage [2]. Carriers may also use alternative fuels such as liquefied natural gas or methanol. They are more environmentally friendly, but their production can cover only 10 % of fuel demand by 2040. In addition, ships equipped with liquefied natural gas tanks require more physical space on board, which reduces the area under the containers [1].

Thus, compliance with IMO requirements pushes the container transportation industry to increase costs, reduce capacity and increase transit time. If costs are not transferred to consignors, the profit margin of container transportation will decrease and may lead to bankruptcy of the most financially vulnerable carriers. Other pressing issues of the industry development are monopolization of the container transportation market and uneven concentration of carriers on the world trade routes. In recent years, there have been mergers and acquisitions of shipping companies in the global container transportation market. As a result, the container shipping market for the three main East-West trade routes is currently dominated by three alliances, as illustrated in Table 1.

Table 1

Market share of 3 alliances on the East-West trade routes (as of February 2019)

Carrier alliances

Market share, %

2M Alliance

17,5

47,8

36,6

Ocean Alliance

42,2

15,5

37,4

Alliance

27

28,5

24,9

Other carriers

13,3

8,5

1,1

Main Routes

Trans-Pacific

Trans-Atlantic

Asia-Europe

‘2M Alliance’ includes such major players in the container shipping market as Maesrk, Mediterranean Shipping Company; ‘Ocean Alliance’ includes COSCO, CMA CGM and Evergreen; ‘Alliance’ includes ONE, Yang Ming and Hapag-Lloyd. The largest players account for the lion's share of the industry market: the total share of alliance container shipments increases from 68 to 90 %, from 55 to 96.4 million TEU in trade turnover.

Table 2

Top 10 carriers and their global market shares (as of February 2019)

Carriers

Market share

Carriers

Market share

Maersk

18,3 %

ONE

6,8 %

Mediterranean Shipping Company

14,2 %

Evergreen

6,4 %

COSCO

14,1 %

Yang Ming

3,8 %

CMA CGM

12,8 %

Pacific International Lines

2,4 %

Hapag-Lloyd

8,2 %

Others

13,2 %

The monopolization of the industry increases the pressure on smaller market players, affects the growth of freight rates, which negatively affects the logistics of remote islands and the least developed countries (taking into consideration their limited access to the Internet of transport services) [3].

In conclusion, it should be noted that the rise in transportation costs will entail an increase in the expenses of forwarding companies, as a result of which many of them will leave the industry. In an increasingly competitive environment, this may lead to better quality logistics services. The largest carriers continue to calculate the possible consequences of IMO 2020 policies, as bunker surcharges have also increased due to higher fuel prices. Raw materials cargoes, the share of which in the container cargo flow is steadily growing, will be affected to a greater extent. The cost will increase regardless of whether the carriers use scrubbers, low-sulfur fuel or liquefied gas [4]. The second decade of the 21st century was marked by mergers and acquisitions in the industry, as well as the formation of alliances between shipping lines. The purpose of such associations is the ability to share ships and optimize costs. Currently, the three alliances cover 80 % of the world's container capacity and 90 % of the Trans-Pacific trade [4]. Such unions provide a number of advantages for their members, but at the same time significantly reduce competition, which is negative for both forwarders and exporters.

With deteriorating climate, declining supplies, increasing fuel costs and investments in new technologies such as scrubbers, rising costs of meeting IMO 2020 requirements, the maritime container shipping market is inevitably undergoing severe tests, as this will ultimately affect the price of the goods for the final consumer.

References:

1. Екимовский А. Обвал неизбежен // Тематическое приложение Контейнерные перевозки (Тематическое приложение к газете “Коммерсантъ”). 2018. № 34.

2. Клепиков В. П. Тенденции развития международной логистической инфраструктуры контейнерных перевозок // Логистика и управление цепями поставок. 2016. № 74.

3. Обзор морского транспорта 2019 года — устойчивое судоходство / UNCTAD, 2019.

4. Бабанская О. / Ольга Бабанская. — Текст: электронный // Торговые войны, IMO 2020 и другие «тревоги» контейнерного рынка.

Основные термины (генерируются автоматически): IMO, CGM, CMA, COSCO, ONE, TEU, UNCTAD, Тематическое приложение.


Ключевые слова

world trade, container transportation, freight rates, market monopolization, IMO regulations
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