Major players have to be truly global to be competitive
Los Angeles, CA (PRWEB) August 03, 2012
The Global Containerized Shipping and Logistics industry has spent the past two years at a major crossroads, where years of rapid growth appear to be at an end and future demand is contingent on ongoing economic recovery. According to IBISWorld industry analyst Caroline Finch, industry revenue is estimated to increase from $151 billion in 2007 to $155.5 billion in 2012, representing a 0.6% annualized increase, including 0.1% expected for 2012. In contrast, industry revenue grew an annualized 11.5% in the five years through 2007.
The difference in growth rates captures the extreme change of circumstances between 2008 and 2009. “During this period, major companies placed ambitious orders for new ships as they struggled to build their capacity to meet demand,” says Finch. “Once the demand fell away, shipping lines cut routes and staff, and many pulled some of their fleet out of the water to remain viable during the downturn.” During 2009, as much as 10.0% of the world's container shipping fleet was not in active service. Industry revenue fell 17.0% for the year. After a rebound in 2010, uncertain economic conditions have encouraged low inventory levels on the part of the industry's clients. This leaves the industry with far more capacity than is required to meet demand. It is estimated that there are more than 10,100 shipping companies in the world, though most are small local operators. Beyond the major players, the market is highly fragmented with a large number of small regional players or family-owned operations, especially in the coastal and inland water transport segments. The Global Containerized Shipping and Logistics industry’s medium level of concentration is attributable to the vast number of markets that the industry covers. This is a sign that economies of scope and scale exist in the market and that major players have to be truly global to be competitive. Current major companies include AP Moller-Maersk, Carnival Corporation, Nippon Yusen Kabushiki Kaisha, Hapag-Lloyd AG and Mitsui OSK Lines Ltd.
Overcapacity is the only certainty the industry faces in the coming years. The industry is dependent on strong global growth and continuing globalization to grow. The threat of a collapse in the Eurozone or a double-dip global recession remains real. On the other side of the equation, the imbalance of supply of ships to demand for shipping services will take longer to resolve. Segments of the industry, such as container shipping, are engaged in a race to build the biggest ship. The operator with the biggest ship captures the lowest cost structure and competitive advantage. However, the cumulative action has driven freight rates down and is expected to keep them there. For more information, visit IBISWorld’s Global Containerized Shipping and Logistics industry report page.
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IBISWorld industry Report Key Topics
Establishments in this industry provide deep sea, coastal and inland water transport. Deep sea and coastal water transport includes the transport of passengers and freight over water, both scheduled and unscheduled. The inland water transport segment includes the movement of passengers or freight via rivers, canals, lakes and waterways, including inside harbors and docks. The industry excludes marine operations such as port operations and stevedoring.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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