Container Transport Services

Positive Retail News Could Boost Container Transport Services

Categories: Port Drayage.

As global shipping losses continue to slow and confidence steadily rebuilds from overcapacity concerns, recent news from the National Retail Federation has many logistics providers and transport coordinators increasingly hopeful. The NRF’s 2016 economic forecast projects retail industry sales growing at a higher rate than previously anticipated — 3.1 percent over the 10-year average of 2.7 percent. Even better, the NRF announced that it expects non-store sales in 2016 to grow steadily, between 6 and 9 percent.

“Wage stagnation is easing, jobs are being created and consumer confidence remains steady, so despite the headwinds our economy faces from international developments — particularly in China — we think 2016 will be favorable for growth in the retail industry,” said NRF President and CEO Matthew Shay. “All of the experts agree that the consumer is in the driver’s seat and steering our economic recovery.”

Economic stability and growth equals increased spending

So what does this mean for container transport services? Simply put: Economic growth and wage stability are leading to increased consumer spending. More sales means more international and domestic shipping.

This bolstered confidence can be seen reflected in the recently released offering from Markets and Markets, the “Cargo Shipping Market by Cargo Type (Liquid, Dry, General, Container), Industry Type (Food, Electrical/Electronics, Mineral Fuels & Oils, Manufacturing), Trade Routes, Infrastructure, Regulations, and by Freight Forwarding – Global Trends and Forecast to 2021.” The report details how the global cargo shipping market is expected to gain significant momentum post-2018, reaching a total volume of 12.52 billion tons by 2021.

The report pins this growth on the recovery of existing export economies and emergence of new ones: Asia-Pacific will see developing economies driving its growth, achieving the largest share of the overall market. Following Europe, North America is estimated to have the third-largest market share in cargo shipping trade, by volume, in 2016. Canada and Mexico’s export-oriented economies will combine with U.S. consumer retail demand to make North America a hotbed for  container transport and drayage service.

New routes, new hubs

Contributing to this brighter future for freight forwarding is the opening of new transport routes and establishment of additional hubs for commerce. With the newly-expanded Panama canal now moving supersized container ships through its wider, deeper channel and locks, many are industry experts are describing the expansion as a “game changer.”

The key for U.S. container transport services is the ability to finally move more significant tonnage coast to coast, as well as take advantage of trade with East Asia at lower logistics costs. Research from The Boston Consulting Group and C.H. Robinson suggests that it could be as much as 30 percent cheaper in some cases to ship certain goods from East Asia to the East Coast.

“For price-sensitive cargo that is relatively expensive to move, routing shipments through East Coast ports to inland destinations will become more cost competitive and increasingly attractive,” the report’s authors write. This ability to cut costs has lend to planned spending on similar expansions and new logistic hubs establishments in other ports such as Houston, and Tampa Bay and Philadelphia. In anticipation of strong economic growth and increased spending, logistics providers should see a more fruitful future on the horizon.