Every March, the shipping community turns its collective view westward to Long Beach for the Journal of Commerce’s annual Trans-Pacific Maritime Conference. This event draws all the major names and players in the industry who gather to hear from economists, carrier executives, reporters, thought leaders and shippers about the issues that are on their plate for the upcoming contracting and shipping season.
Brandan Mueller, RIM’s Vice President of Sales, was in attendance at the sessions.
This year felt like things were in a bit of a greater state of upheaval than past years, owing to the continued US/China tariff negotiations, a potential slowing of the economy, congestion on the West Coast that has cascaded inland and angered everyone and the situation on the IMO2020 requirement for cleaner burning, low-sulfur fuel is starting to take shape. A very interesting topic that also came up this year – dynamic ocean pricing that more reflects the way people look at and buy airline seats than a locked-in, back-and-forth, file-the-rate contract negotiation.
The congestion issues plaguing ports and subsequently inland rail destinations aren’t exclusively due to the advanced onslaught of containers and extra loaders that attempted to beat a January 1st deadline that would have seen additional duties on the third annex of Chinese goods rise to 25%. Rather, vessel on-time performance sank as low as forty percent, import warehouses operating above 100% utilization (in fact, some estimates were that there was less than five percent available warehouse space in Southern California) and the continuing chassis shortages that meant that containers couldn’t be moved away from where they didn’t need to be.
Brandan’s perspective, low-sulfur fuel was the talk of the town. The event’s keynote speaker, Daniel Yergin, HIS Markit vice chairman (HIS Markit now owns the JOC), said in his estimation that the IMO2020 deadline was going to happen, but issued the two-word caveat “Donald Trump” as a reason that it might be impacted. As refineries ramp up capacity to meet the demands for the necessary quantities of low-sulfur fuel, that could have an indirect impact on the price of other petroleum products such as diesel, gasoline, jet fuel and home heating oil. Mr. Yergin was previously the founder of energy consulting firm Cambridge Energy Research Associates.
For additional information, feel free to contact us and Brandan will reach out to you directly to share more of his experiences from TPM.