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Are ocean carriers in a “boom and bust” cycle?

By Patrick Burnson, Executive Editor
October 11, 2011

While the biggest ocean carriers seek the economies of scale from ever-larger super post-Panamax ships, they run the risk but of introducing too much capacity at the same time, thereby ruining the already fragile supply/demand balance.

This observation, made by Drewry’s latest quarterly Container Forecaster, also suggests that the “boom and bust cycle” is now an annual occurrence, rather than something that happens every 4-5 years.
Neil Dekker, a chief analyst with Drewry, noted that three factors will determine how the industry will develop in the next 5-10 years. 

Number one, he said, will be carrier behavior and commercial strategies. In other words, will they learn from their mistakes? Number two, will be the continued investment in ever larger container vessels. And finally, how will they respond if consumer confidence continues to erode, and “near sourcing” takes share away from global deployments?

About the Author

Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).

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