Moving It Forward Banner

January 25, 2017

Allen Lund Company Newsle tter

Emergent Issues in Distribution and Transportation

In This Issue
Change in Pacific Shipping Lanes

Quick Links

Follow us on...
Contact Information
Jenn Cole, Editor  
Allen Lund Company
Grand Rapids Office
(800) 641-5863 

Change in Pacific Shipping Lanes

If you thought 2016 was a year of major changes, hold onto your hats, it looks like we're in for more of the same in 2017.

Change is coming in the Pacific shipping lanes. Independents have been bought out or pushed out and what was controlled by four major alliances will be reduced to three alliances as of April this year. The three alliances will control approximately 91% of all trans-Pacific capacity. It is expected that after six years of significant losses (last year container lines reported nearly $10 billion in losses), the effect of a smaller group controlling a larger portion of the capacity will bring immediate changes upward in pricing.

In addition, this consolidation means that more of the fleets will be newer, larger container vessels. Where a ship that could carry 8,000 twenty foot containers or their equivalent was considered large just three years ago, many of the newer vessels can carry 18,000 to 20,000 containers. Newer, taller equipment has to be installed to handle the offloading of these vessels. A single vessel carrying as much as four times the containers as older ships held means feast and famine cycles at the port; which creates spikes and valleys in volume for drayage and a less consistent market for land carriers. Not only that, but the increased expense for equipment at the port comes at a time when ocean carriers will be asking for more concessions - since the reduction in the number of active vessels due to size increase will also mean fewer ports of call.

Now add in the advent of a new administration in Washington, D.C. that will undoubtedly create changes in DOT regulations due to go into effect this fall as well the uncertainty of fuel costs...the list goes on. Another year of change that will bring challenges could turn into opportunities, another chance to prove the resiliency of our industry. As the ancient Greek philosopher Heraclitus said, "Change is the only constant in life." The business take on that should be, "He who adapts most quickly wins."

Steve Kendall
Transportation Broker, Orlando

Visit our blog and let us know what you think.
Steve Kendall   began his career with the Allen Lund Company Orlando office in February of 2014. He came on board with 11 years of experience in the transportation industry. He graduated from Olivet Nazarene University with a BA in English with minors in Education and Psychology. He also completed Post Baccalaureate work in Journalism at University of South Florida, and University of Florida.
About Allen Lund Company: Specializing as a national third-party transportation broker with nationwide offices and over 450 employees, the Allen Lund Company works with shippers and carriers across the nation to arrange dry, refrigerated (specializing in produce), and flatbed freight; additionally, the Allen Lund Company has an international division, which is licensed by the FMC as an OTI-NVOCC #019872NF, and a logistics and software division, ALC Logistics.  


The content of this email is intended to provide information on the transportation and logistics industry and is promotional in nature.  Reliance should not occur on the content of this site other than to generally advise the reader as to such industry and no action should be taken in reliance on this site's information.  With the exception of the Allen Lund Company website, ALC is not responsible for any contents linked or referred to from these pages.  The copyright for any material created by ALC is expressly reserved but content on this site, in whole or in part, may be used, reproduced, or republished without ALC's prior written consent provided that ALC is identified as the source.
Privacy Policy:  If the opportunity for the input of personal or business data (email addresses, name, and addresses) is given, input of these data takes place voluntarily and with no assurances of limited distribution, use, or restricted access by ALC.
White stacked logo