Executive Insights – Lars Jensen, Sea Intelligence Consulting

Executive Insights is a series by Shipping and Freight Resource that provides insights and thoughtful analysis about the industry..

This series features selected individuals from the industry and is aimed at enriching the knowledge of the readers with what is happening in the shipping, freight, maritime, logistics, and supply chain industry..

Executive Insights also gives you a chance to pick the brains of these industry veterans, leaders, and enablers..

In this edition of Executive Insights, we caught up with Lars Jensen – CEO of Sea Intelligence Consulting, on his views on what is happening in the container shipping industry currently..

 

SFR : The question that is foremost on everyone’s mind globally – how long do you see the current scenario in container shipping such as rate increase and equipment shortages lasting – most realistic timeframe..??

LJ : It appears we are at peak impact presently. Equipment availability appears to slowly – quite slowly – getting better, whereas port congestion is a more problematic issue. At the very best it will take a month to resolved, but in some locations could take more

 

SFR : If you have to choose ONE major factor that has contributed to this current scenario in the container shipping industry, which one would it be and why..??

LJ :  Simple: The pandemic. The pandemic caused the sharp drop in demand in spring which disrupted all flows, and the the sharp boom in demand in recent months which is also due to the pandemic: because people cannot travel, go to parties, eat out etc. they instead sit at home and spent the money buying things instead

 

SFR : Based on your analysis over the years, which container shipping line has been the most successful in navigating the problems thrown at it by the industry – COVID-19, dropping freight rates, reduced volumes, capacity, financial discipline and equipment crunch..??

LJ : All the main carriers have navigated the pandemic extremely well – especially in terms of avoiding a market crash in first half of 2020.

The recent extreme price spikes are of course good for the carriers’ financial performance, but is also significantly eroding the customer relations they have and might turn out to create problems in 2021.

 

SFR : How do you see the crew change issue playing out now that there are a few new variants of COVID-19 and it seems the ban is back.. What, in your mind is a solution that is workable for all..??

LJ : I have no good view on a solution apart from the obvious: seafarers has to be seen as “critical infrastructure” and hence should be allowed to happen.

 

SFR : Would the container shipping industry and alliances been much different if the Hanjin bankruptcy had not happened and was the Korean Government correct in not intervening to save Hanjin Shipping..??

LJ : The industry was on a consolidation path anyway. Had Hanjin not gone bankrupt I would not have been surprised if at some later financial downturn in the industry they might have been merged with HMM (even though neither Hanjin nor HMM would like it – it might be necessary for support)

 

SFR : How far is the industry with its digitalisation attempts..?? Although there are several discussions, webinars, and interactions on this, where are we really and practically with digitalisation and how far is there still to go..??

LJ :  Quite far. Many major carriers were able to send some 50-75% of their staff home from one day to the next – and still most of the world’s supply chains still functioned OK.

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