“Seasonality in Liner Shipping Industry”
Shipping is considered to be one of the most competitive international businesses due to its cyclic nature. This arises out of the interplay of international trade volumes and supply of shipping tonnage. The critical issues in a shipping business are familiarity with international trade, shipping cycles, ship building and ship breaking environment. It is a fact that liner trades are subject to fluctuating demand and sometimes seasonal driven.
Shipping cycles are more or less related to shipping seasonality. Cyclical fluctuations, seasonal fluctuations all present risk to shipping industry. Seasonality effects result from concentrated periods of diurnal visitor activity, as well as the periodicity and annual seasonal changes in patterns of liner arrivals. To maximize returns, companies routinely redeploy vessels from one global region to another in response to seasonal market conditions. In parts of the world, therefore, fast ferries are operated only on a seasonal basis to allow for adverse weather conditions (Pinder & Slack, 2004).
Shipping lines must therefore find strategies in order to make up for losses when there are severe seasonal fluctuations. Like for example, the available capacity needs to exceed shipped volumes if operators are to provide capacity taking into account the constant market changes, as well as cyclical seasonal peaks in demand and imbalances between demand for the inbound and outbound legs of the voyage. Such is usually what the liner shipping industry does in order to make up for losses.
Credit:ivythesis.typepad.com
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