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Supply Chain Efficiencies: How Ports Facilitate Collaboration

The recent wave of ocean carrier consolidations and shipping alliance realignments helped to stabilize an industry that was losing as much as US$5 billion annually. 

Between 2016 and 2018, the roster of major shipping lines shrunk from 21 to 14. During that same period, the shipping lines reshuffled the alliances, dropping one but making each of the remaining three bigger by composition and capacity. As a result, the top 10 ocean carriers now move 80% of the world’s containerized cargo. Operationally, the realignment sent shock waves throughout the entire supply chain. While disruptive, these moves were seen as necessary to right-size capacity in an era of mega vessels and to stem the financial losses that forced several lines to sell or go out of business. 

But in order for shipping lines to realize the full economic benefits of realignment, waterside economies of scale must be met by landside efficiencies, and that involves achieving operational alignment with terminal operators, railroads, trucking companies and other service providers.

Dr Noel Hacegaba, Deputy Executive Director/ COO, Port of Long Beach

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