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Can cargo owners become shipowners?

This shift may be a possible norm

After Home Depot and Walmart announced plans to have their own vessels to sustain worldwide inventories, it raises suspicions on the possible reshaping of the small- and medium-sized vessel owners’ market.

Sea of oppression
As it is now, unkind maritime conditions have turned world trade upside-down. Every stakeholder is able to name at least two pressing issues that crippled their businesses, and being forced to turn to other measures even if it means suffering losses in other areas. When port congestions paralysed shipping, shipowners took the chance to hike chartering rates and impose loadings in the pretext of equipment shortage. Subsequently, shipper owned containers (SOC) got involved – directly addressing the box shortage. Cargo owners who managed to keep themselves afloat through SOC were aware this was only a band aid.

Further oppression came in many forms; paying more just to secure cargo space, ports pausing operations from COVID-19 outbreaks, and diversions due to bottlenecks. A wide range of damages readily followed: supply shortage, wastage, inflation and eventually businesses ceasing operations.

Market consolidation
Omitting big liners from the equation, cargo owners have demonstrated interests in chartering smaller vessels to spread their inventories. The drawback may be more chartering slots incurred, which corroborates the need to evaluate if it is more cost-effective to own a vessel. From the profit and loss standpoint, it is an investment to save costs and evade unnecessary expenditure.

However, would it even be a possibility that cargo owners join forces with shipowners to forge an alliance through a joint venture? Referencing Home Depot’s and Walmart’s instances, should their ventures turn out to be acquiring companies owning smaller fleets, it may change the face of maritime. That may also drive some form of enforcement towards high profile shipowners to play their cards well for their big scale shippers.

 

Marine Online News Team
Please email us at marketing@marineonline.com to contact the author for this article.

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