Thursday, 10 August 2017 13:26

Hardwood Lumber Transportation Options Keep Changing

One thing that seems to be a constant is the continuous changes the hardwood lumber industry experiences when it comes to dealing with ocean lines and the domestic transportation industry.

Shipping Containers 34915896 mlOver the past year or so there have been numerous acquisitions, mergers and even closures of many well-known ocean shipping lines. Following the recent acquisition of OOCL by Cosco Shipping Holdings and the merger of United Arab with Hapag Lloyd, only 12 global container carriers will remain in operation by early 2018, versus 20 in 2016, according to research analyst Alphaliner.  This will reduce even more once the proposed merger of the JP3 gets approved. NYK, MOL & K Line will merge into a single entity called One Network with a target date of April 1st 2018. The good thing is it has not impacted available capacity as of yet, but it certainly seems to have the potential to in the future.  This along with the unprecedented scrapping of vessels by the ocean carrier industry could lead to reduced capacity and impact ocean rates in the long run.

Looking back over the past few years’ shippers have been experiencing historically low ocean rates, but it certainly feels like that might be changing.  Here are a few thoughts we have as it pertains to the global shipping industry.

  • Container shipping rates and capacity for the remainder of 2017 should be relatively stable.
  • The anticipation of more “mega ships” coming on line, (those that carry 18 – 20,000 TEU’s), should keep rates from rising until carriers can sufficiently fill these vessels.
  • Industry experts believe even more of the smaller ocean lines may still being acquired before this is all done further impacting capacity.
  • The pending April 2018 merger of the three Japanese lines, (MOL/ NYK & K Line), could significantly affect the dynamics of hardwood lumber shipping since combined they are a large supplier to the industry.

On another matter, the ELD or Electronic Logging Device initiative in the Unites States is set to take place this December. This initiative will be for all truckers that serve both the domestic and export shipping business. It is yet to be determined how this industry change will impact rates, capacity and transit times. However, it is likely that it will.  One thing that all shippers and receivers need to know is that carrier detention will certainly increase as carriers must re-coup costs for delays. It will be imperative for both to efficiently load and unload carriers with minimal delay.  It should certainly be an interesting year! 

Bob Lewandowski
Baillie Lumber
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