Three Changes in Ocean Shipping That Will Impact Global Trade in 2018
When it comes to shipping around the world, 2018 just might be the year you have been waiting for. Worldwide shippers and major logistical companies might see the results they’ve been dreaming of – specifically calmer waters and steady trade – throughout the year 2018. Let’s consider the outlook of global shipping for the next 365 days with specific consideration to the United States. Essential factors to explore are the Trump presidency, US-China trade relations, and a continued strain on the freight market.
The Trump Presidency
With President Donald Trump’s arrival in the office for the first time in 2017, he is expected to set in the office for 365 days in this year. There are several cabinet appointments that impact the maritime industry, specifically the Transportation Secretary, Secretary of Homeland Security, and the Secretary of Commerce. Trump’s appointees promised a focus on infrastructure development, port infrastructure, emerging technologies, and maritime transportation.
We might see sanctions and compliance restrictions relating to the environment, additional tariffs, and potential trade changes. Overall, a second year of any term represents one of stabilization and confidence. Expect ocean shipping changes to positively impact global trade.
US-China Trade Relations
At some point, China is expected to undergo a downturn in terms of shipping volume within the next few years. As predicted in McKinsey & Co’s report, the shift in Container Shipping can be seen in exporting goods to service-based business in the next 50 years. This should be around 6% to 7% of real GDP.
Consequently, it creates the chance for the United States to move in and expand. Relationships between the United States and China matter since the two largest economies in the world dictate everything from import restrictions to pricing to container access. Plan for shipping with consideration to trade deficits, surpluses, and even currency fluctuations.
John Murnane, a partner at McKinsey, says, “The U.S. and Canada continue to grow strongly, and volumes in 2017 outpaced expectations. This is good news for all ports and terminals. We expect 2018 to continue this strong volume growth.” The opportunity for the United States to fill the worldwide deficit left in place by China.
Strain on the Freight Market
There are two primary reasons for a strain on the freight market, the ELD mandate officially taking effect during 2017 and the freight market experiencing higher volumes without more vehicles entering the field.
During the year 2017, we saw the ELD mandate officially taking effect with a gradual phasing of the products. By April of 2018, all truck drivers need to be Electronic Logging Device compliant and because of this independent contractors and smaller companies may need to leave the market until upgrading is an option.
Since ocean shipping brings the goods to port, it is up to the freight transport teams to get goods to their final destination. The freight market is projected to get tighter throughout 2018 as volume increases and rates get higher. The only way to stay ahead in a year of strain is through the implementation of technology for reporting, intelligence, and transparency.
Get ahead by integrating ocean shipping with freight technology for on-time delivery in 2018. Strain on the freight market can come out to your advantage when planning accordingly.
Get Ahead in 2018
The International Monetary Fund’s World Economic Outlook projects growth to be around 3.7% in 2018, which is a higher percentage than last year’s growth.
Global shipping has a positive outlook for 2018. The combined benefits of a Trump presidency, US-China trade relations, and a strain on the freight market can benefit your business. With these three changes in 2018, ocean shipping will only impact global trade for the better.