Author: Aytac Akgul

After Forming the Alliances, the Global Container Shipping Industry Decreased to 3 Carrier Options

An unsteady year in the container-shipping industry, which included one big operator going under, and others bundling together to stay afloat, ended with three major alliances arranged to dominate ocean trade for years to come. Overcapacity and weak global trade forced the largest players to merge or form alliances, allowing them to cut operating costs by hundreds of millions of dollars by sharing ships and port calls. The three major groupings, called 2M, Ocean Alliance and THE Alliance, have cleared most regulatory hurdles over the past two years. Customers should know that there are no longer are over 15 carrier...

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Importance of Logistics for Valentine’s Day

Valentine’s Day is a holiday dedicated to the expression of love. This year, billions of Americans will celebrate by purchasing flowers, cards, candy and other gifts.  Though they may have suffered over the perfect way to express their feelings, many have not considered the essential role the transportation industry plays in the execution of their special day. With millions of flowers bought by consumers every Valentine’s Day, there is little doubt that colorful, fragrant blooms are a hallmark of the holiday. Before anyone can say, “Be mine,” with a dozen flowers, months of detailed logistics go into the planning...

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Why Do Ocean Container Carriers Lose Money?

It’s an essential principle in Finance that every company when they start in any business, aims to make profit from their services or products. However, as we take a look at the current situation of the shipping industry, this principle has been ignored and resulted in huge financial losses over the past several years. We all know that Ocean container carriers aware of the losses before they occurred just because their business strategy or budget for the upcoming years to be volume-oriented in order to get more market share from the competitors. We understand this simple strategy, however can’t they make...

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What is Going to Happen to the Ocean Alliances After Things are Back to Normal in the Ocean Container Shipping Industry?

First, it’s important to understand the idea behind the creation of the ocean alliances. Over the past couple of years, ocean container carriers have formed into four mega-alliances, largely to create economies of scale. By sharing space on mega-vessels, carriers benefit from lowered operating costs due to their large volume. After the alliances were created, some carriers wanted to benefit from other carriers’ services based on their flagship trade. You can see these changes in the below table: Back in 2014, the first questions from exporters/importers were asking “Will the mega-alliances mean lower freight rates, or higher ones? More sailing...

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Panama Canal Expansion’s Impacts on US Shipments

The Panama Canal Expansion is the largest project at the Canal since its original construction. The project is expected to create a new lane of traffic along the Canal through the construction of a new set of locks, doubling the waterway’s capacity. The existing locks allow the passage of vessels that can carry up to 5,000 TEUs. After the expansion, the Post-Panamax vessels will be able to transit through up to 13,000/14,000 TEUs. The Expansion will double the Canal’s capacity, thus having a direct impact on economies of scale and international maritime trade. The Program consists of several components:...

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