2019 Conference Objective
Entering its fifth year in Hamburg, Germany, the 2019 JOC Container Trade Europe Conference will deliver answers for retailers, manufacturers, consumer products firms, energy, agribusiness, and other European users of containerized shipping services by analyzing major trends in intercontinental shipping supply, demand, and capacity, and by exploring and illustrating strategic and innovative opportunities to improve transit times and reliability, and reduce costs, whether through technology/digitization or operational and planning initiatives. Leveraging its editorial team of veteran journalists, the JOC Container Trade Europe Conference is built out of the industry-leading news and analysis appearing on JOC.com and in The Journal of Commerce to deliver the latest data, information, and potential industry solutions to the supply chain challenges and chokepoints that freight interests wrestle with daily.
The Tide Turns: Is Europe Entering a New, Troublesome Era?
The European container shipping market in 2019 faces challenges in significant areas that will affect carrier profitability and have potentially serious consequences for shippers. After increasing 4.5 percent in 2017, container volumes grew just 1.4 percent in 2018, and although IHS Markit expects European imports from Asia to increase by 4.2 percent this year, economic headwinds could make it difficult to get there. Economic growth is slowing in the European Union’s largest economies, and concern is growing about a possible recession in Germany, the post-Brexit UK, and France. Considering the Asian inbound trade accounts for half of all European imports, slowing growth in volumes from Asia isn’t good news for container shipping
While demand slows, container shipping capacity is heading the other way. After factoring in the mega-ship deliveries coming this year, SeaIntelligence Consulting estimates that capacity on the Asia-Europe trades will increase by a net 10 percent. The level of demand will be crucial in filling these vessels and allowing carriers to lift and sustain freight rates at profitable levels, something they have struggled to do. Instead, carriers have tried to manage their capacity as best they can, and with an ongoing supply-demand imbalance, frustrated shippers will need to get accustomed to more blanked sailings, slower steaming, adjusted port calls, and more idled vessels. This will further challenge shippers already dealing with on-time performance that has ranged from 35 to 70 percent in the major east-west trades.
While carriers struggle to manage their Asia-Europe capacity, another challenging factor for carriers and shippers will begin to emerge in the second half of 2019. The International Maritime Organization’s low-sulfur fuel mandate kicks in on Jan. 1, 2020, and carriers will begin switching to the new fuel as early as this year’s third quarter. Carriers estimate that using low-sulfur fuel will add $10 billion to $15 billion a year to their annual bunker costs and have said they will pass those costs on to shippers via revised Bunker Adjustment Factor formulas. Within those formulas, however, a key element is unclear: the price of low-sulfur fuel that will determine the level of surcharges shippers will pay. If availability of the fuel is tight, shippers could see big increases in their freight cost.
Most carriers are adopting a cautiously optimistic approach to 2019, which, considering the lingering uncertainty, can be regarded as positive. If the big European economies continue to weaken through 2019, the impact will be felt on container volume, and carrier profitability will remain under threat even before the multibillion-dollar increase in fuel costs hits their bottom lines. Under these circumstances, shippers are likely increasing their transportation budgets, because any gain on lower freight rates could be lost quickly in higher bunker surcharges.
With a program dedicated to the needs of shippers operating in Europe, the Container Trade Europe program will cut to the chase, obtaining straight answers to key questions shippers have regarding their container shipping tactics and strategies.
• Macroeconomic and Container Shipping Outlook: With major economies and demand slowing, how does container shipping supply and demand look as shippers, forwarders and carriers prepare for 2020?
• Technology and Innovation: What advances are solutions providers making on shippers’ major pain points, and how are shippers embracing them?
• Low-Sulfur Fuel Mandate: With carriers shifting to more costly, cleaner-burning bunker fuel, what should shippers expect in terms of costs and the bottom line.
• The Fight for Surface Freight: With the EU giving rail a boost and trucking the cold shoulder, what are shippers’ best options for moving goods to the hinterland.
• Sector-Specific Roundtables: Deep dives into the specific challenges shippers face in the automotive, retail, refrigerated, and chemicals industries.
• Shipper-Led Case Studies: Examples of how shippers and their logistics, technology, and transportation providers are working together to overcome specific problems and challenges.