Tuesday, September 17, 2013

Profitability vs. Expansion: Shipping Software is Key for Survival in Container Shipping

Profitability vs. Expansion: Shipping Software is Key for Survival in Container Shipping

Maritime shipping companies forecast rough sailing ahead due to a slump in global demand for container shipping and continuously increasing fuel prices. Add to that the growing supply of new ships driving competition for cargo and freight rates to a critical level. With this, shipping companies are steering farther toward cost-cutting and maximizing profit, setting aside other considerations such as expansion in the meantime. As has been pointed out by experts repeatedly, implementing functional shipping solutions software plays a critical role in achieving this goal.

Last year, A.P. Moller-Maersk, the world’s biggest container shipping company, warned of a slowing global trade in shipping. Earlier this year, the world’s biggest container carrier reported a 35 percent decline in its first quarter profit from last year, despite exceeding its first quarter target. Additionally, the shipping giant forecasts that its 2013 profit would be lower than that of 2012 even though it expects to surpass last year’s earnings of $461 million.

Whether it is good or bad news for the world’s leading container carrier, these results reflect the dire reality that shipping companies are struggling to stay in profit as a result of increasing costs of operation. The situation must be even more painful on the part of smaller, low capacity carriers. To address this problem, shipping software companies continue to develop advanced shipping company software designed for the very purpose of increasing the efficiency of ships, ports, and terminals and improving profitability.

Maritime software solutions are proven to streamline container shipping operations and enable operators to minimize common errors that can potentially incur significant damage and costs. Shipping companies, big or small, need to wise up and focus in improving profitability first, before considering other options such as expansion. In this time of tough climate for container shipping, business is truly a game of survival of the fittest, and automation using integrated shipping software is the best way to win.

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