It seems that big ships may be setting off a price war. Only the last carriers standing will survive these. That’s those who can scrape out a minuscule profit over marginal cost. At these prices carriers are not getting up to average cost, in all likelihood.
This post comes via Richard Ward on linkedin, from Freight Investor Services, a firm dealing in derivatives– futures, forward pricing, swaps and options, and the like.
Container Freight – how low can they go? – Freight Investor Services
For me, the important thing in this article is the fact that a fort operation company has decided to operate at truly long range. They participate in supply chains clear to China from Duisburg Germany. They have invested in warehouses and even make use of the trans Asian train from China.
http://www.shippingtribune.com/significant-increase-in-sales-revenue-and-profits-for-duisport-group/
Why haven’t more American port operators looked at longer range operations?
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Supply Chain Risk
Supply Chain risk comes in many forms, not just strikes, as recently on the west coast. The Houston ship channel is narrow, and a collision especially with a spill, could close it for a while.
Houston Channel Remains Closed After Ships Collide – Supply Chain 24/7.
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Supply Chain Digest Port Technology International Marine Link
Supply Chain and Logistics 