By FTW Staff reporter 15 Mar 2017 17:15 (UTC+2)
The marine freight industry is forecast to reach a total value of $210 billion by 2021, following a recent slump in growth according to global research company MarketLine.
Globally the industry has struggled in recent years, suffering from a negative compound annual growth rate (CAGR) of 3.3% between 2012 and 2016 amid an increasing oversupply and a collapse of global demand, according to MarketLine analyst, Tom Hawthorne.
The company predicts a sluggish recovery. Despite the global industry value declining by some $44 billion (12.7%) in 2015, the industry is expected to return to 2014 levels by mid-2019 and reach a value of approximately $210 billion by 2021.
Hawthorn says: “The recovery in the industry is expected to be fuelled primarily by a return of global demand as oil prices increase, and while it will take some time for the industry to reset to pre-2015 levels, the shrinking of industry value is short-lived. The players who survived 2015 are likely to have learned from this episode and to incorporate greater efficiency and cost-saving mechanisms in their businesses.”
Personal Note:
I have found that our industry have suffered tremendously since 2013. Not only did about 20% of clearing agents and local business close their doors or was forced to be liquidated, But a lot of shipping lines have cut staff, some up to 56% of their staff. With our industry on the decline I cannot help but wonder if most of us will survive until 2021.
With the tremendous decline in shipping Air & Sea Sales Reps are put under tremendous pressure to bring in new business. Our phones is ringing off the hook, but alas not of clients but of sales reps asking for business and appointments. It has come to a point were we have decided that all meetings be book on the same day once a week, in order to stay on top of our shipments. If you allow yourself to be distracted even for an hour per day for sales meetings, you will lose the plot. By the time the meeting is finished you are not in the mood to complete the current work and just leave it for later.
And an after thought, have any of you noticed how extreme SARS has become with shipments. Normally if either border control, customs or SAPS stopped a container and proof of that exam was given to the other parties they would authorize release. But now everyone wants to do their own exams, so not only are they refusing to do it at the same time, the depots gets overrun and refuse full unpacks. And Durban SARS is the worse, stop every second container for NCRS LOA. Which if this is a new client for you and he did not even have this in order,,,,,, well you can imagine the exteme headaches.
But Yes as I was saying, the unfortunate result of all this, is that SARS is deterring clients from importing, with the huge amount of storage and demurrage, the clients are simply walking away from cargo and refuse to import again, this is also contributing to the huge decline in imports into South Africa.