Latest news from Heavy Lift & Project Forwarding International Magazine

Destructive freight rate environment here to stay

The container shipping industry is expected to continue to struggle with overcapacity and an inability to deliver value to shareholders, warns consultancy McKinsey & Company in its latest report.

The report, entitled 'Container shipping: More mergers, better mergers', suggested that while container shipping brings significant value to the world, it delivers little to its investors, producing low rates of return.

"We estimate it has destroyed over USD100 billion in shareholder value over the last 20 years," said the report. "Its profitability was particularly poor between 2011 and 2016, when the industry average return on invested capital (ROIC) was consistently lower than the weighted average cost of capital (WACC)."

McKinsey cites overcapacity as the key reason for the poor performance, exacerbated by slowing growth.

The report says that, unfortunately, overcapacity is here to stay and its projections of supply and demand show a continued large gap for several years, which will close by the early 2020s.

"With overcapacity, container lines often accept any cargo, even if it barely covers marginal cost; after all, carrying something extra on today's ship is usually better than carrying air," said the report.

"Many industry watchers are predicting the end of the destructive freight rate environment. Unfortunately, we are not so optimistic."

While the industry is experiencing unprecedented consolidation, McKinsey warns that it is not yet enough to turn the industry around.

 

www.mckinsey.com 

Heavy Lift | News

USA ends steel and aluminium tariffs on Canada and Mexico thumbnail image

USA ends steel and aluminium tariffs on Canada and Mexico

May 24 - The USA is removing steel and aluminium tariffs imposed on Canada and Mexico under Section 232 of the Trade Expansion Act of 1962, with all retaliatory tariffs on US goods and any pending litigation also coming to an end.
Views: 336
Maxim names duo for Pacific Northwest thumbnail image

Maxim names duo for Pacific Northwest

May 24 - Maxim Crane Works has appointed Travis Wilt and Alex Clark to lead the expansion of its services in the Pacific Northwest region of North America. 
Views: 347
PPG restructures training course thumbnail image

PPG restructures training course

May 24 - The Project Professionals Group (PPG) has restructured its project cargo forwarding training course into a one-day format.
Views: 317

Heavy Lift Across The World

Discover heavy lift and project logistics industry news from around the world by region.