• Monday, October 22, 2018

Fasten your seatbelts: Key drivers in 2017 - Subscriber Access Only

By BCShippingNews 26 January 2017

If you are one for excitement, uncertainty and change, then 2017 should be a banner year for you. Having survived (mostly) two tumultuous commercial years, 2017 could include the ingredients for a recipe of very, repeat very, modest commercial recovery.

Before one becomes excessively excited about the potential for a break-even income statement, marinte commerce in Canada will need to deal with the uncertainty created largely from pending policy choices both at home and abroad; decisions which may or may not align with the needs of ports and ship owners. Perhaps more than ever before, the marine industry will seize the attention of the public and this unprecedented visibility should be leveraged, but could inevitably be a risk to addressing many of the constraints to its growth within the larger supply chain.

Photo above: A done deal? The Kinder Morgan pipeline expansion project will likely still be a key issue for the upcoming B.C. election. Photo by Dave Roels.

Needless to say, if some of the following predictions prove wholly or partially correct, this year should be particularly challenging for operators, but headed in a positive direction nonetheless. The following drivers are considered the key ones affecting the marine transportation sector in British Columbia in 2017.

The commercial market

The past year was filled with difficult decisions for ocean carriers in an effort to survive exceedingly negative commercial conditions. While not a surprise, these challenges were principally driven by a lethargic global economy, record-low commodity prices, and an over capacity of vessels in most commodity trades. The overly simplistic outcome of this combination of circumstances was a race to the bottom for freight rates that made even the most agile of owner/operators shake in fear of survival, and of course some did not survive.