Slow Steaming Stretches Supply Chain

“These are desperate times for consumers, so cheap prices from Asia are more important than before,” says Drewry.

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During the past few years much has been reported about the transfer of manufacturing from Asia to countries located closer to western markets, but much of it appears to be “hype over substance,” say supply chain analysts for Drewry Maritime Research.

According to the London-based think tank, near shoring will increase, but off a very low base, so its impact on deep-sea ocean carriers is unlikely to be significant in the short-term. In fact, carriers are likely to continue “slow steaming” to elongate the supply chain in the Asia-EU trade lane.

“These are desperate times for consumers, so cheap prices from Asia are more important than before,” says Drewry.

Predicting the situation after that is dangerous due to the uncertain growth rate of internet shopping, which will soon demand same-day delivery, add analysts. This is a more immediate “revolution” confronting retailers, with up to 10% of all retailing in Europe likely to be conducted over the internet by 2016, according to Jones Lang LaSalle.

Another more immediate trend will be the transfer of production away from China to cheaper Asian countries.


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 pburnson@peerlessmedia.com.

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