Challenges in the container shipping industry today versus 50 years ago

Even if a lot has happened during the past 50 years, some challenges still remain and new ones are lurking in the horizon.

“Infrastructure was and remains a challenge. Fifty years ago, the vessels were able to carry approximately a hundred TEU containers at the most, compared to 23,000 TEU containers today. This puts high pressure on ports and terminal capacity”, says Tuomas.

“Also, there is the issue with supply and demand. Many cities grow rapidly and have become huge importers, but they have little or no export. Containers arrive at the ports fully loaded but leave empty. The fill rate of a ship going from China to Europe, for example, is generally 90 to 100 per cent, while in the opposite direction, it is only half – at its height. Having to carry thousands of tonnes of empty containers, in an already strained and competitive industry, is a big concern. This is a global problem and a great challenge for the entire shipping industry – economically and from an environmental perspective”, says Fredrik.

Greencarrier Liner Agency and Evergreen Line prepares for the future

Operating in an industry that, perhaps more than any other, enables for a truly global economy – connecting countries, markets, businesses and people – also comes with great responsibility and the need to respond and evolve to new changes and customer demands.

“Digitalisation will play a very important role in the future. It allows us to expand our sales options and customer service capabilities. Also, carriers will most likely start to control the transportation chain to an even greater extent – all the way from the producer to the consumer – and offer more extensive logistics solutions”, says Tuomas.

Fredrik agrees. “Digitalisation is definitely a future challenge. A lot of documentation is difficult to digitalise and the shipping industry is still somewhat conservative. How the goods flow will be managed and financed are major questions for the future. The blockchain technology and its transparency is also interesting to keep in mind. But a lot is happening and I think we will benefit greatly once new digital systems are up and running”, says Fredrik.

Also, increasing tonnage, continued strong price pressure, and more mergers are awaiting. “In the nineties, there were about 30 major shipping companies in operation. Today, there are about seven. In only a few years, the number will probably have dropped to five or six due to mergers”, Fredrik says.

But both Greencarrier Liner Agency and Evergreen Line are prepared for the future. “Greencarrier Liner Agency is a company built on knowledge. We want to contribute with our knowledge, involvement and commitment and be part of the dialogue to have on impact on the shipping industry and politicians – globally as well as locally”, says Fredrik.

Sustainability and environment is also part of the future plans, as it has always been a successful concept for Greencarrier Liner Agency. Fredrik explains: Over the years, we have increased our focus on smart and eco-friendly transport solutions to meet customer demands and be a frontrunner in the transport industry.

Tuomas continues: We always offer our customers alternative transport solutions when required and alternative shipping routes if necessary”. As for Evergreen Line, they are consequently pursuing the latest technology, compatible with modern environmental policies.

In line with the Greencarrier Spirit and the belief that everything is possible, both Tuomas and Fredrik are optimistic about the future.

“As there are many great challenges, there is also great potential to create new superior transport solutions. I believe the possibilities are just as great today as they were 50 years ago, and I look very much forward to continue working with Evergreen Line and see what we come up with together in the future”, Fredrik concludes.

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A loyal relationship was formed in the early days of containerisation

Greencarrier Liner Agency has a long history with Evergreen Line and it was formed about the same time as containerisation really took off in the early 1980’s. The ability to ship smaller quantities at higher frequencies was an important development for the industry. As an early player, Evergreen Line started off on a small scale and grew to become one of the world’s largest transport companies.

One might wonder how Evergreen Line, as an outsider, managed to become such an early player on the market. The company has always preferred to work alone, or else team up with other lines through loose-knit alliances, rather than become locked into highly integrated consortia or join rate-setting conferences. And so, there is more to the story.

At that time, there was the FEFC (Far Eastern Freight Conference) where all shipping lines with traffic between Asia and Europe were connected, which had existed since the end of the 19th century. Evergreen Line challenged the authority of this belligerent cartel. The confrontation made a lasting impression on the veteran shipowners and broke the dominance of the FEFC. Evergreen Line’s global network of services rapidly expanded and a much more open market competition began to take form.

A relationship built on loyalty, mutual trust, and commitment

Dr. Yung-fa Chang’s willingness to take on the FEFC when the conference had a tight grip on the Asia-Europe trades was typical of the fighting spirit that Evergreen Line has always exhibited – and still does today. This is also something that has permeated the cooperation between Evergreen Line and Greencarrier Liner Agency right from the start. Based on mutual values and future visions, the two companies have developed a very strong relationship over the years.

Fredrik Hermansson is the Managing Director at Greencarrier Liner Agency Sweden and has been with Greencarrier for 21 years. “Our history with Evergreen Line is extraordinary. There is a high degree of loyalty, mutual trust, and commitment in our relationship”, he says. “We are one of Evergreen Line’s few agents and trusted to make a lot of decisions locally. Together, we have developed our Nordic market and created a well-deserved reputation in the Nordic region as well as achieved long-term customer relationships worldwide.”

Tuomas Timgren is the CEO of Greencarrier Liner Agency. He became the Managing Director for the Finnish division of Greencarrier Liner Agency in 2007, three years before stepping up as CEO for the entire Nordic division. He remembers what it was like back when it all started. “Evergreen Line was actually the very first shipping company to ship timber from Finland to Japan by containers via the help of Greencarrier Liner Agency, he says. They have always been one step ahead in the shipping industry. When first entering the container shipping market, Dr. Yung-fa Chang was quick to establish business contacts also in the United States – the world’s number one supplier of containers at the time, and a country where many harbours had already adapted to the idea of container shipping and implemented the necessary infrastructure”.

Developments in the container shipping industry over the past 50 years

Looking back, there has been a tremendous development for the container shipping industry in general and Evergreen Line in particular. The vessels have become bigger and increased in numbers, harbours have become larger, the volumes have increased, and more goods are being shipped by sea at higher frequencies.

“The growth of the container shipping industry is about five to ten per cent each year, and the need for and interest in container transports only increases, not least in terms of emerging markets, such as Nigeria”, Fredrik says. “We can now expect new logistics flows and transport routes from East Asia to Europe and across the Pacific Sea as well as from East Asia to North America in general and California in particular.”

Tuomas agrees. “We see great potential in developing countries, not least in Africa. Many harbours worldwide are developing their infrastructure to be able to handle major container shipments.”

“Also, the door-to-door service is much improved”, ads Fredrik. “Containers are often stuffed on site, for example in a factory in China, and then shipped off to the final destination in Sweden without transhipment.”

There is also the globalisation to take into consideration. Increased international shipping has been, and continues to be, both an effect of and a major contributor to worldwide globalisation. Lately, because of increasing competition in the market, Greencarrier Liner Agency has seen a development where the already sheer number of carriers has decreased due to mergers, takeovers and new corporate alliances.

“Competition is tough and today’s container shipping companies need to have a high level of knowledge and skills to remain on the market – of which Evergreen Line is a good example”, says Fredrik.

Independence and long-term thinking holds the key to success

Fredrik is right. Although many competitors have been bought out or gone bankrupt over the years, Evergreen Line has managed to stand strong. With the exception of the acquisition of the Italian shipping company Lloyd Triestino back in 1998, Evergreen Line has solely grown organically over the past decades.

“Evergreen Line has always been a very independent company, well-run and financially solid. They have succeeded to maintain a strong presence in Taiwan and Japan, where they first established their business”, says Tuomas.

“Evergreen Line continues to be one of the largest players in the industry. It is a successful family business with a long-term thinking, which has been a central strategy from the very beginning. Given the solid success over the years, one must say, that they have done really well”, Fredrik says.

Keep an eye out for Part 2: Evergreen Line celebrates 50 years of success in the container shipping industry.