Lessons learned in 2016 from Hanjin
The collapse of Hanjin Shipping last year confirmed the belief held by many that the ocean industry is in a fragile state. With a prolonged state of underutilized capacity amid historical low rates, ocean carriers are forming and strengthening alliances to remain sustainable.
At the same time, the Hanjin fiasco took countless shippers by surprise and resulted in the detention of thousands of containers throughout the world. Ensuring that the same scenario does not play out again will require strategic planning and paying close attention to the health of each shipping line.
Expect a roller coaster ride for ocean rates in 2017
With regards to spot rates, international shippers should prepare for a long year of ups and downs. Competition to fill capacity at sea is a high priority for the shipping lines, and we can expect that spot rates will reflect the situation.
While low rates can be very enticing, shippers should also keep in mind that it was the unsustainable low pricing that helped to fuel the demise of Hanjin. Again, shippers should ensure that their ocean forwarders are looking at the big picture rather than today's best deal.