Recently, MSC CEO Soren Toft said that the underlying causes of tight capacity and global shipping prices have not changed, making the logistics industry and global supply chains vulnerable to another economic shock.
At the TPM conference in Long Beach, he told an unseated auditorium that global port congestion is largely due to the failure of major importing regional infrastructure to meet surging demand.
"It would be naive to say that the port has not learned from this experience," explains Toft." "But the fundamental reason has not changed, namely that the United States and Europe do not have adequate infrastructure."
He said that the world has seen the importance of the maritime industry and supply chain in keeping trade flowing, but now shippers believe that they need to change their views and move to the distribution supply chain model.
For example, the United States has reduced its dependence on China and with India and Southeast Asia and other Asian countries reached bilateral agreements.
Toft said: "Shippers will spread their supply to five, eight or 10 locations." He also believes that moving production back to an already mature economy is uneconomic.
, however, global economic growth will reach 2021-22 levels within four years, port growth tends to be limited by geography. For example, the ports of Los Angeles and Long Beach are surrounded by urban development and have no room for expansion, but they will need to increase throughput to meet future demand, Toft said.
As cargo owners move their goods from West Coast ports (now largely out of labor disruption concerns), there are fears that at least some of these shipments will be forever lost.
Toft said: "MSC will be in the shipper requires it to be attached, if the owner in the east coast to establish a distribution center, we will go there."
Commenting on MSC's huge spending on used and new build tonnage, Toft said it showed the company's commitment to "now and in the future" shipping.
However, he noted that the company, like its competitors, has enjoyed "a few good years" and has taken the opportunity to invest in its fleet to make it more "green"-CII regulations will mean that MSC in the coming years will need to scrap older vessels.
In addition, Toft explained that the decision to end the 2M alliance in 2025 is because the market environment in the past 10 years has changed, and Maersk and MSC are on "different tracks".
He added: "We will land comfortably on our own feet and operate independently, but we may work with Maersk and others to sign a vessel sharing agreement (VSA)."
However, Toft also warned that transportation costs will increase due to the transition from fossil fuels to low-carbon or zero-carbon fuels. He added: "The green future is a more expensive future, and those costs will eventually be passed on to consumers."
Toft says decarbonization will likely come down to three fuels-methanol, ammonia and synthetic liquefied natural gas. To accelerate the transition, he said, a global carbon price was necessary, rather than regional regulation like the Emissions Trading System.
Source: one shipping