Ocean Freight Capacity is On the Rise … But the Consequences Are Unclear

South Korean shipyards are busy churning out Maersk’s “Triple-E” class, which at 400 meters in length are the world’s biggest Super Post-Panamax ULCV (ultra-large container vessel) container ships; new Super Post-Panamax ship-to-share cranes that can lift up to 65 tons (or more) are being installed at ports around the world; the Panama Canal Capacity is doubling its capacity in 2015 (and the average vessel calling on the US East Coast is expected to double in capacity from 4,500 TEUs to 9,000 TEUs); and North American Eastern ports are expanding up and down the coast.

This means that the capacity to do more global trade, both across the Atlantic and the Pacific, will soon be here. If trade doesn’t increase as fast as the big ocean carriers are predicting, even though fuel costs are rising, it’s likely that costs will remain stable, or even decrease slightly, despite inflation, as carriers compete to keep their holds full. If trade increases at the predicted rate, it is likely that costs will continue to rise at a steady rate. And if trade increases faster than expected, it will only be a few years until the major ports are again congested and growth potential flat (unless you take advantage of ports like Halifax).

What will come to pass, it’s hard to say, but not being aware of the potential for anything to happen where ocean freight is concerned is a risk. But it’s not the only risk to the viability, and cost, of your supply chain in 2014. It’s just one in dozens. There are a number of other significant risks that your supply chain could be facing in 2014, each with its own cost impact. If you would like some insight into what 13 other risks are, and what you can do about them, download SI’s latest white paper on the Top Ten Transitions To Tackle in 2014 to Tame the Tolls, sponsored by BravoSolution. (Registration Required) The follow up to last year’s Top Ten Things to Do in 2013 to Control Costs, this white paper looks at the state of the market one year later and provides you the foundations you need to attack the forthcoming challenges of 2014 head-on.