Published On: Fri, Feb 10th, 2017

Why The Shipping Industry Has Taken A Dive

The global shipping industry has taken somewhat of a dive during the last few months. That’s left many people wondering what the future might hold. Some of the biggest firms are still making a killing, but it’s the smaller operations that seem to be suffering. With that in mind, we spoke to some experts to get their opinions on the situation. In this article, we’ll detail some of the factors they believe are causing the most issues. Will things improve and get back on track in 2017? Only time will tell. As you will learn, political situations around the world can play a significant role in the state of this marketplace.

 global shipping industry

  • Fewer imports and exports since Britain voted to leave the EU

The people of the United Kingdom recently made a landmark vote to leave the European Union. While many people believe it was the right decision, the outcome has already begun to affect trade. The pound has dropped in value significantly, and there are now fewer imports and exports to Britain. However, experts predict the situation will resolve itself within a couple of years. The main reason for the problems relates to uncertainty surrounding the markets. As soon as the UK works out a deal with the EU with regards to trade, we should see an improvement.

  • Worsening conditions in countries close to shipping lanes

There are many different shipping lanes around the world. However, most European countries send their goods to the far east using the same routes. Those paths run past countries like Syria and Iraq where there is currently a lot of turmoil. Many companies now charge extra to travel through those waters, and that has increased shipping costs. There are even some firms that refuse to move vessels through the Straits of Hormuz. We need to wait and see how things pan out before we can rectify the situation. The Iraqi army is currently making advances toward Mosul, and experts say that can only be a good thing.

  • Rising costs and reluctance to build relationships with new companies

The world’s largest shipping businesses have been in operation for more than a hundred years. During that time, they’ve established relationships with suppliers and specialists that are hard to break. That means people supplying the industry have no desire to offer competitive prices. However, we could see a vast improvement if CEOs were more inclined to deal with new partners. A representative from Martek Marine recently explained the benefits of striking new deals. He said many new brands in the marketplace could help shipping firms to save a fortune. So, it all comes down to their willingness to advance and push the industry forward.

We hope you now have a better understanding of the global shipping situation at the current time. There is no need to worry about the state of the market because business owners will always send products abroad. So, it will never disappear altogether. Also, exporting goods by sea is much cheaper than using alternatives. With that in mind, we’ve just got to hope political situations improve and the specialists can get themselves back on track.