The remarkable turnaround in ocean carrier fortunes is the freight transportation tale of the COVID-19 pandemic. Through tight capacity controls, the world's global container shipping companies were able to rapidly match a decline in volume during second-quarter pandemic-related lockdowns that were as high as 30 percent on some trades. This ability to quickly flex capacity dramatically improved the financial performance of all carriers, even those that have long run in the red, such as HMM and Yang Ming.
It has put them on course for a 2020 profit that SeaIntelligence Consulting estimates could reach $15 billion. Tight capacity management is here to stay — a structural change, according to Maersk CEO Soren Skou — and shippers will need to find ways to work within the adjusted networks. But the collective management of capacity has attracted the attention of regulators in China and the US, which will be a troubling development for carriers trying to manage uncertain trade flows.
Outside of the operational aspect are shipper relationships that have been bruised by the carriers' response to the pandemic. Container shipping prosperity has been accrued at the expense of their customers, with shippers facing disruption to service levels, difficulties in securing capacity despite holding annual contracts, and soaring rate levels. These relationships will need to be mended as the industry moves forward into a future characterized by uncertain demand from recession-hit consumers, volatile rate levels on all major trades, and the second wave of COVID-19 outbreaks across Europe that is disrupting supply chains.
Senior Journalist, Maritime & Trade
Associate Director, Maritime & Trade
Chief European Economist
10:00-10:05 AM Welcome Remarks
10:05-10:30 AM The European Economic Outlook
10:30-11:00 AM Getting Shippers Back On Board
11:00-11:30 AM Avoiding the Air
11:30 AM-12:00 PM Europe's Hub Port Challenge
12:00 pm Closing Remarks
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