World Shipping Council's Koch predicts 'very challenging' 2016
Time：2015-12-01
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Speaking at the recent Pacific Transportation Association dinner in Oakland, California, Mr Koch alerted shippers to be prepared for less "free time" allotments for their containers in 2016, the American Journal of Transportation reported.
"Let me start by stating what is unfortunately not obvious `free time` is not free. The containers ocean carriers provide shippers are not free. The chassis are not free. Their capital expense to the carriers is enormous.
"Their M&R (maintenance and repair) expense is substantial. The opportunity cost of not having a container or chassis available for another customer because another shipper is holding it is substantial. The space a container uses in a port facility is not free. It is using very expensive real estate, and every day a container sits in a busy facility, it adds to facility congestion and terminal operating costs".
He also said that market forces for liner shipping will continue to be very challenging and competitive. Rates and industry profitability will continue to be under pressure. Carriers will continue to focus on lowering their operating costs and improving their efficiency and carriers` operating costs and capital investment will be managed frugally by necessity.
Mr Koch also noted that the costs of environmental compliance will increase. "A decision from the (US) Coast Guard on ballast water treatment technology seems probable in 2016, likely triggering massive technology retrofitting requirements. Vessel air emission regulatory forces will continue to require the industry to seek every practical means to improve its energy efficiency".
Mr Koch also said that all parties will continue to consider how the efficiency of local port facilities can be improved. "Each port will face its own particular issues. This work is underway. Smart people are working on it, but it will be andall hands` effort".