May 17, 2020

Global shipping industry in danger of decline

Research and Markets
Taiyou Research
Freddie Pierce
2 min
Follow @JosephWilkesWDM To read the latest issue of Supply Chain Digital click here A report into the global shipping industry has been released today...

To read the latest issue of Supply Chain Digital click here

A report into the global shipping industry has been released today, warning of decline.

Online market research store Research and Markets has released the Global Shipping Industry 2013 – Forecast, Trends and Opportunities, report from Taiyou Research company, which provides analysis and overview of the entire industry as well as individual elements such as ownership and prices.

The report states that in the coming years, the global shipping industry is expected to decline by five to 10 percent.

Oversupply and high bunker oil prices will eventually lead to a constraining of performance.

The report said: “A sustained oversupply of vessels combined with high bunker oil prices will pressure margins in most shipping segments. The dry-bulk and crude oil tanker segments are likely to have the largest supply-demand gap in 2013, complicating these sectors' ability to meaningfully improve their earnings.

“The tanker market has also been affected by the oversupply of vessels in the near term aided by lower OPEC production levels; though the outlook for the product tanker segment is more favorable since demand growth is likely to outpace supply during 2013, leading freight rates to rise by the end of this year. Box freight rates for the container segment have rebounded since March this year.

“However, strong improvement in earnings should not be expected for the full year in this segment. This reflects sustained high bunker oil costs and pressure on container rates stemming from recent increases in deployed tonnage of box ships.”

But Japanese conglomerates could be affected to a lesser extent by the negative market trends that will damage other global shipping trends. This is due to the scale of the Japanese conglomerates, their diversification, (including their liquefied natural gas, or LNG, fleets) and strong relationships with customers, said the report.

The report includes analysis of 35 major shipping companies such as AP Moller Maersk, China COSCO, China Shipping Development, D/S Norden, Golar LNG, Kawasaki Kisen, Hyundai Merchant Marine.

AP Moller Maersk, Nippon Yusen, Kawasaki Kisen, Mitsui OSK Lines, China COSCO and Evergreen Marine are some of the top players in the industry, the report suggested.

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Jun 21, 2021

Elon Musk's Boring Co. planning wider tunnels for freight

2 min
Elon Musk’s tunnelling firm plans underground freight tunnels with shipping containers moved on “battery-powered freight carriers”, according to reports

Elon Musk’s drilling outfit The Boring Company could be shifting its focus towards subterranean freight and logistics solutions, according to reports. 

A Boring Co. pitch deck seen and shared by Bloomberg depicts plans to construct wider tunnels designed to accommodate shipping containers. 

Founded by Tesla CEO Musk in 2016, the company initially stated its mission was to offer safer, faster point-to-point transport for people, particularly in cities plagued by traffic congestion. It also planned longer tunnels to ferry passengers between popular destinations across the US. 

The Boring Co. completed its first commercial project earlier this year in April. The 1.7m tunnel system is designed to move professionals between convention centres in Las Vegas using Tesla EVs. It says the Las Vegas Convention Centre Loop can cut travel time between venues from 45 minutes to just two. 


Boring Co.'s new freight tunnels

The Boring Co.'s new tunnel designs would allow freight to be transported on purpose built platforms, labelled as “battery-powered freight carriers”. The document shows that, though the containers could technically fit within its current 12-foot tunnels, wider tunnels would be more efficient. Designs for a new tunnel, 21 feet in diameter, show that they can comfortably accommodate two containers side-by-side, with a one-foot gap between them.

The Boring Co.’s new drilling machine, dubbed Prufrock, can tunnel at a rate of one mile per week, which is six times faster than its previous machine, and is designed to ‘porpoise’ - mimicking the marine animal by ‘diving’ below ground and reemerging once the tunnel is complete. 

Tesla’s supply chain woes 

Tesla is facing its own supply chain and logistic issues. The EV manufacturer has raised the price of its vehicles, with CEO Musk confirming the incremental hike was a result of “major supply chain pressure”. Musk replied to a disgruntled Twitter user, confused as to why prices were rising while features were being removed from the cars, saying the “raw materials especially” were a big issue. 

Elon Musk Tweet

Car manufacturing continues to be one of the industries hit hardest by a global shortage in semiconductor chips. While China’s chip manufacturing levels hit an all-time high in May, and the US is proposing a 25% tax credit for chip manufacturers, demand still outstrips supply. Automakers including Volkswagen and Audi have again said they expect reduced vehicle output in the next quarter due to a lack of semiconductors, with more factory downtime likely

Top Image credit: The Boring Company / @boringcompany

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