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What to Expect Post-Covid for the Shipping Industry

We are all fed up with hearing bad news day every day during the supply chain crisis. So, I decided to not write about all the issues with the supply chain, but rather where those issues will take us as an industry from the corporate to individual level.

I do believe that people do forget things easily, however I don’t think what we are going through today will be forgotten, especially by the business leaders in the shipping industry.

So, how will the shipping industry look in 2-3 years from now? Here are my thoughts – positives only!

1. I think the world finally grasps the importance of the supply chain and how impactful it can be for our lives.

In fact, in the 20+ years I have been in the shipping industry, I see us on the mainstream media for the first time globally. People realize that if we stop, life stops as we know it. Because of that, countries at the political level will invest more time and funds to make the improvements necessary and resources available. For years, I had been claiming that as a developed country, the U.S. has a developing country infrastructure, and I am sure everyone knew about it, but no action was taken. Today we all see that, and we must catch up with developed nations on our supply chain infrastructure. We must invest money and talent to make our sector more stable for future shocks.

2. We find out that partnership and loyalty are not expensive words but the values that you cannot build in the short term.

We will remember (at least some of us) those who support us in these times, and we will support them when things turn around. We will build strategies not only based on pricing, but more on stability and better flow of cargo and information.

3. Alliances and merges are good, but to have options is better.

Up until two years ago, most of us agreed that economies of scale are “good”, since many companies were losing money and were not able to sustain service/product levels. But as we observe that all containers are manufactured by few companies, all chassis are produced by few companies, and shipping is done by three alliances, these factors completely remove the flexibility and variety in sourcing.

Obviously, we know that competition and variety bring better services and value. However, the environment before Covid didn’t create opportunities for those niche players. We saw big companies get bigger and smaller companies disappear in the past 6-7 years in the shipping industry. I believe that we will see more players getting in the game in these different sectors that will diversify our industry.

Based on the below chart from Statista, the market share of the leading container shipping alliances from 2012 to 2021 have increased dramatically.

4. Truck drivers are pillars of the system that all pieces of the supply chain rely on, and trucking is not something we should see as just another service that will be there granted.

According to the CEO of the American Trucking Associations, Chris Spear, the U.S. still needs 80,000 more truck drivers. The government and private sector should work hand to hand to make truck driving attractive financially, while the infrastructure should work to create the fluidity of cargo flow and efficiency.

5. The harmony between technology and people must go hand-in-hand.

The trend of digitalization is something I support 100%, but the question is to what extent. In the shipping industry, there are so many moving parts within so many different technology levels. To operate just through a dashboard is for the perfect world, not for the Covid or post-Covid world. We need not just good people but great people to do problem solving, to create out-of-the-box solutions and to empathize with their clients, so they do what is necessary either to get the job done or to at least reduce the damage. This brings back to the core of any company: invest in technology but first invest in your people. Many companies re-experienced that in this last 1.5-2 years.

To summarize, countries will invest more to their infrastructure, and they will put people with right experience to those positions.

We know that we will be taken care of by our partners, as we take care of them with loyal partnerships. Diversification is a key for flexible more creative solutions during a crisis that we cannot put a price tag on. Every piece of the supply chain is crucial for the shipping industry, and the trucking sector is one of those pillars. And finally, throwing technology towards every problem doesn’t really solve the problems – we need to train and invest in our people.

M. Can Fidanhttp://www.mts-logistics.com
Can is originally from Turkey, where he got a Bachelor’s Degree in Economics at Koc University in Istanbul. After working 5 years at MTS Turkey, he moved to Hong Kong as an MTS Representative, where he stayed 2 years working on Asia Development of the group. After Hong Kong, he came to MTS New York. He is currently the Vice President of Business Development and Export Manager at MTS Logistics, Inc. Fun Fact: Can (read as John in Turkish) is a HUGE soccer fan, and Besiktas is his team. Despite the fact that he has been living abroad since 2005, he follows each and every game religiously!
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