Decade of Demand- Avoid being the “low hanging fruit”

Read the full newsletter here.

In the past few months, we have seen governments balking at the higher cost of maritime transport as they try to mitigate the impacts of inflation on their constituents while watching multi-billion-dollar profits, which are predicted to be even higher in 2022.  In response, the United States has instituted regulations on companies to balance their trade (Ocean Shipping Reform Act of 2022), and companies like CMA CGM are being asked to reduce their rates.

As usual, shipping is “low hanging fruit”.  The lack of understanding about our business results in misplaced efforts to find solutions.  Yes, shipping needs to do its part to facilitate change, but too often the “solution” is misplaced, ineffective, and late- hurting our industry instead of finding solutions.

While I applaud CMA CGM’s swift responsiveness to the French government’s demand, I regret that we reached this highly visible action which will most likely have a ripple effect through the sector.  As seen in the United States, the responsibility for the short supply of vessels, increased consumer spending resulting in a logistics disruption, and subsequent supply/demand imbalance was placed squarely on the shoulders of shipping.  Yes, the many ships lying offshore in Los Angeles/Long Beach make a compelling visual, but they don’t tell the story of the narrow terminal, truck and train pipelines which were the source of the logjams.

Shipping needs to be proactive rather than reactive.  We need to identify the demand drivers and meet them as they arise, not when “civilians” have locked into misplaced positions which don’t resolve the issues, but rather hamper them.

Keep optimizing,
Carleen

Media Contact:
Carleen Lyden Walker

+1.203.255.4686
c.walker@shippinginsight.com