What are the biggest challenges shippers are currently facing?

Jul 20, 2017News

According to the 2017 Allianz Safety & Shipping Review, large shipping losses have declined by 50% over the past decade. There were 85 total shipping losses reported in 2016, down 16% compared with the previous year and casualties at a less dramatic, 4% decline. While these safety improvements are largely due to increased international regulations, technological advancements and heightened vigilance, the shipping industry isn’t totally in the clear. Here are some of the biggest concerns the shipping industry is currently facing.

No one wants another Hanjin

With the Hanjin bankruptcy still on the minds of logistics firms and shippers around the world, every BCO and NVOCC functions from a cautious standpoint and seriously addresses the risk vs. reward of all major decisions regarding routes, prices, and mergers. They are consistently checking financials and thoroughly analyzing carriers before making any new contract commitments.

The Hanjin collapse brought with it a new, harsh reality and the industry became less trusting with a thread of uncertainty following everyone around like a ghost. No one wants another Hanjin, and the industry is doing everything they can to prevent it.

U.S. and China Relations

With protectionism on the rise, not only within the United States, but Europe as well (think Brexit), geographic regions that were once considered central hubs to international trade are being reconsidered. China is stepping up to the plate in a major way with their One Belt One Road initiative a multi-year project that blurs the lines between countries, aims to bring together similar trade views and routes throughout Asia and Europe – with China coming out on top.

Combine that with India’s rapid shipping growth and their oppositional stance towards the One Belt One Road Initiative, and you’ve got an uncertain future on your hands.

Piracy and Crew Kidnapping

According to the International Maritime Bureau (IMB), incidents of piracy in 2016 continued their downward trend. The bureau recorded 191 incidences of piracy in 2016, down 22% from 2015 (246) and the lowest total recorded since 1998.

While there has been a direct decrease in the number of incidents, Somali pirates have not completely gone away. In March 2017, pirates captured the oil tanker, Aris 13 off the coast of Somalia and demanded a ransom – the first such seizure of a large commercial vessel since 2012. Then, on June 1, 2017, armed pirates attempted to board the tanker MT NAVIG8 PROVIDENCE in the Gulf of Oman.

According to Logistics Management, 2016 saw a three-fold increase in crew kidnappings compared to 2015. Pirates kidnapped 62 people for ransom in 15 separate incidents during the year. Just over half were captured off West Africa, while 28 were kidnapped from areas around Malaysia and Indonesia.

Lastly, with the rise in technology and ever-expanding size of mega-ships the potential effects of a collision are exacerbated by the sheer size of the vessels and the manpower behind them. Just take a look at this graphic (credit here) to see how a $4 billion loss could easily occur from a single collision.

At TOC Logistics, we stay abreast of the challenges facing the shipping industry today and maintain a strong line of communication with our clients. Our decisions are grounded in research and based on the individual needs of our clientele. Trust us to get the job done right.

Learn more about our services today and contact us for more information.






Our capable and experienced team is standing by to assist organizations and supply chains across the globe. Click the button to get in touch with our team.

Share via
Copy link
Powered by Social Snap