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A New, Improved Way to Package Goods for Transport with Liner Shipping

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1. Introduction
Liner Shipping developed new ways of packaging goods for transport; their growth has influenced the global trade. Even during economic crisis there has been tendency to move more and more goods through this means. Their growth influenced the efficiency of the whole supply chain. The progress of this trade has been faster than other sectors (Brooks 2000). Global environment of trading is constantly changing and Geographic concentrations of interlinked business and factories called clusters are making the trade pattern more difficult to predict. Like all other businesses the Liner shipping companies are thriving for competitive advantage over their rivals. And this has led to low freight rate and frequent services. But with…show more content…
2013). Therefore, liner shipping companies must be extremely careful with ship investment decisions. Insufficient investment can reduction in market share and may lead to losing market position, while huge investment may affect the financial stability of the company. (Fan & Luo 2013).
These decisions also affect the economy as they affect the global logistics network, especially when the economy is recovering from the recent financial crisis. Huge investments in the liner shipping have led to bigger ships and over supply of cargo spaces, which in turn affected the demand-supply equilibrium leading to low freight rate under usage of cargo spaces (Clarkson PLC 2014).
Global container trade(1963-2013) (UNCTAD, 2013, p.23) Liner shipping companies are still struggling hard with capacity management due to deliveries of ships accounting for 1.3 million TEU. Most of the companies are reducing their services which enabled them to push through rate increases temporarily, But the profit margin is still limited (Clarkson PLC 2014). To cope with the market environment focusing on intense pricing pressure, shipping companies have started to cooperate in many forms, ranging from slot-chartering, vessel sharing, cargo sharing, strategic alliances, mergers and acquisitions etc. The main reason for alliances is due to the need of cargo volumes in the scale of operation and to spread the risk associated with investment in the huge vessels.
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