FIATA-GSCC Market Structure and Maritime Competition Webinar Series – Session 2

On May 10, 2022, Dr Theo Notteboom (Ghent University / Antwerp Maritime Academy / University of Antwerp, Belgium) and Mr Jonathan Gold (National Retail Federation, USA) delivered Session 2 of the webinar series on market structure and maritime competition. Looking into the issues affecting the global maritime supply chain, the speakers approached the topic from the academic and industry user perspectives – offering crucial insights to the participants during the lecture and the Q&A.

Among the key highlights of the discussions from an academic perspective, were an analysis of the COVID-19 disruptive effects and underlying mechanisms on the maritime supply chains, supported by a before and after COVID-19 comparison of the state of the ocean shipping industry. In pre-COVID times, ocean carriers were undergoing financial crises leading to mergers, alliances and vessel-sharing to reduce overcapacity, allowing entry into new trades via global service networks. The post-COVID time is a different world, where record profits are used for vertical integration: ocean carriers acquiring inland logistics and terminals, creating digital platforms, expanding into air freight and last mile eCommerce delivery systems. The verticalization trend is accelerating. Outlook into the uncertain future of the Alliances was provided. A key takeaway for SMEs is the crucial importance of digitalization to build and secure competitive advantage in the future.

From the (U.S. retail) industry stance, the continuing surge in merchandise trade imports – despite inflation and slower economic growth – was stressed, as well as eCommerce growth. It was noted that pre-existing problems of the maritime supply chain, such as port congestion, chassis shortages, excessive detention and demurrage charges, were exacerbated by COVID, causing the dramatic rate increases. Among the solutions put forward, the growth of collaborative approaches by convening high-level working groups with affected stakeholders was stressed. And again – emphasis was put on digitalization and the use of information technology to improve supply chain efficiency, such as the creation of national freight portals to provide shipment data through interoperability with shippers’ freight management systems. Finally, the need for more government intervention to prevent rate collusion and unreasonable detention and demurrage charges was highlighted, with mention made of the recent Federal Maritime Commission (FMC) penalties issued against two shipping lines, as well as the efforts to amend and strengthen the Shipping Act authority given to the FMC.

Interested in learning more? Contact me at [email protected] to register for the webinar series and get access to the session recording.  Educators and students can register for FREE.

 

Please visit https://porteconomicsmanagement.org to access Dr. Notteboom’s online reference materials

Post Author: Chung Tam