McKinsey & Company offers unique perspective on life after the crisis for the liner shipping industry.
The liner shipping industry is facing unprecedented challenges in the current environment with severe knock-on effects on container terminals. Record losses have driven many of the biggest corporate names in the industry to the brink of collapse, leading some to question how the sector can survive the downturn without radical change.
TOC Asia 2010 brings you McKinsey & Company’s industry perspective, which will address five major questions concerning the future of liner shipping:
- What are relevant macroeconomic scenarios?
- How long will oversupply of capacity last?
- How will the industry perform? What is the expected loss pool?
- What drivers are fairly certain, what are uncertain? What is the range of industry loss?
- What are the implications for liners and container terminals and other stakeholders (ie, what is the new normal after the crisis and what strategic and operational improvement levers exist for liners)?
McKinsey’s perspective has been developed through a unique fact-based approach leveraging the company’s vast experience in the shipping and terminal industries. Critical components of this approach include:
- Demand/supply analysis
- Demand determined through macroeconomic forecasting
-Supply estimated by taking stock on current fleet, order book (incl. changes), economics of scrapping
- Profit pool modelling |
-Historical correlations, especially on pricing/industry conduct
- Dynamic model: utilisation drives rates, which in turn drive profit
- Analysis of stakeholder incentives
- Understanding of stakeholder objectives, eg, short-term survival vs long-term profit maximisation |
At
TOC Asia 2010, McKinsey & Company will use the above criteria to outline a perspective on the liner shipping industry with a strong focus on the implications for container terminals.
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