Slow Steaming Stretches Supply Chain

During the past few years much has been reported about the transfer of manufacturing from Asia to countries located closer to western markets, but much of it appears to be “hype over substance,” say supply chain analysts for Drewry Maritime Research.

According to the London-based think tank, near shoring will increase, but off a very low base, so its impact on deep-sea ocean carriers is unlikely to be significant in the short-term. In fact, carriers are likely to continue “slow steaming” to elongate the supply chain in the Asia-EU trade lane.

“These are desperate times for consumers, so cheap prices from Asia are more important than before,” says Drewry.

Predicting the situation after that is dangerous due to the uncertain growth rate of internet shopping, which will soon demand same-day delivery, add analysts. This is a more immediate “revolution” confronting retailers, with up to 10% of all retailing in Europe likely to be conducted over the internet by 2016, according to Jones Lang LaSalle.

Another more immediate trend will be the transfer of production away from China to cheaper Asian countries.

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