Shipping and Logistics Services Outsourcing

In 2007-2008, the availability of cheap credit led many shipping companies to place orders for large vessels, most of which were either delivered at the end of 2011 or are being delivered this year. A recent International Transport Forum report calls the rush for capacity nothing but 'irresponsible investment'. Mr. Dagfinn Lunde, global shipping-expert and responsible for the shipping finance business at Deutsche Verkehrs Bank (DVB), said in the company's newsletter that the high growth period led many countries to increase their ship-building capacity.

The signs are positive…the mood upbeat. The turbulent waters that the shipping and logistics industry traversed through the previous year seem to have calmed down. The first six months of 2010 have shown increased growth for most companies as compared to the same period the previous year.<br><br>However, shipping and logistics companies are coming out of the recession with a higher level of resilience and a smarter plan of action. They are navigating these uncertain times with extreme prudence by re-evaluating their strategies. The key lies in turning challenges into opportunities.  Read on to find out what the four predominant options for the industry today are and what each one of them entails.

With the global economy showing an upward trend, 2010 is a harbinger of the shipping and logistics industry getting back on course. The BDI has risen to above 3,000, with trans-pacific shipping lines already reporting vessel use in the mid-to-high 90 percent range and hinting at significant increase in volumes this year. Pent-up demand has also developed for new logistics services. The prospect of good times, however, comes with a note of caution. Read on to find out what are the pricing models and ownership structures you can adopt in this climate.

The global recession rocked the Shipping and Logistics industry with idling vessel capacity, significant reduction in volume, and immense pressure on pricing and margins. Speaking at an international trade and transportation conference in Houston recently, Christopher Koch, President & CEO of the World Shipping Council (WSC), said the shipping industry in 2010 faces its toughest times since containerization was invented in 1956.

Today's economic climate is clearly causing gloom, doom, fear and often panic for the logistics industry. A host of factors - the credit crunch, unprecedented economic volatility, deteriorating consumer confidence, yo-yoing fuel costs,increased governmental regulations, declining revenues, severe earnings and cash flow pressures, loss of pricing power and excess
capacity - together are significantly impacting the industry's bottom line.

As the world watched the captivating fireworks and synchronized movements of hundreds of performers at the Beijing Olympics, the logistics industry was grappling with its own synchronization efforts behind the scenes to keep critical supply chains in motion around Beijing. The Chinese government had ordered the closure of several factories around the city in an attempt to improve the air quality ahead of the Olympic Games. They also imposed severe restrictions on the movement of cargo trucks around the city a month in advance. While these restrictions where challenging for companies operating and distributing in the local area, they also had ramifications for companies sourcing from Beijing, proving that global supply chains must be flexible to deal with surprises and disruptions.