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Jan.9, 2017

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22 THE JOURNAL OF COMMERCE www.joc.com JANUARY 9.2017 2017 ANNUAL REVIEW & OUTLOOK & OUTLOOK & JOC SHIPPER SURVEY ALTHOUGH T WO OF the three par ticipants in this year's JOC Shipper Roundtable expect carriers to face significant headwinds in raising pric- ing, a broader section of cargo owners believes shippers will have to pay higher rates to container lines to ensure their viability and avoid another Hanjin -like disaster that stranded some cargo for months. A majority of the nearly 150 shippers surveyed by The Journal of Com- merce in December expect their trans-Pacific contract rates to increase this year, with most, 46 percent, preparing for increases of 1 to 10 percent. More than 20 percent of respondents expect rate increases of 10 to 20 percent. With the economy picking up — in the third quarter, at least — shippers appear confident that their volumes will rise: 43 percent of respondents said they expect the volumes they ship to increase 1 to 5 percent this year, while another 12 percent anticipate growth of 6 to 10 percent. Although expectations of higher volumes and rates are good signs for the industry, shippers believe the uncertainty of the past two years is likely to continue, with 77 percent of respondents saying they believe more industry consolidation is on the way. Shippers also are wary of the launch of new vessel-sharing agreements in April, when the Ocean Alliance and Transport High E iciency, or THE, Alliance, take e ect, assuming regulatory approval. About 47 percent of shippers expect service disruptions as the VSAs work through the kinks of their new operational agreements, while 31 percent expect service will remain the same, the JOC survey found. Another 14 percent actually expect to see service levels improve. The uncertainty of 2017 extends beyond the industry itself and into the political arena. Shippers are unsure what to make of President-elect Don- ald J. Trump's plans to institute a protectionist trade policy. Asked if they expect Trump to follow through with such plans, 40 percent responded, "Maybe," while 32 percent said, "Yes," and 28 percent said, "No." — Dustin Braden Up More Than 50% Up 30 to 50% Up 10 to 30% Up 1 to 10% Unchanged Flat to Down 5% Up More Than 10% Up 6 to 10% Up 1 to 5% Unchanged Drop 1 to 10% Drop by 10% or More Major Disruption Some Disruption No Change Major Improvement Some Improvement Trans-Pacic contract rate expectations Do you expect the Trump administration to follow through with protectionist promises damaging to containerized trade growth — at sea and on NAFTA borders? How much to you expect your containerized shipments to change in 2017 compared to 2016? Do you expect more container line consolidation in 2017? Yes - 78% No - 9% Not sure- 13% Yes - 32% No - 28% Not sure- 40% How much do you expect your 2017-2018 trans-Pacific contract rates to change from 2015-2016? How much to you expect your containerized shipments to change in 2017 compared to 2016? Source: JOC Shipper Survey, December 2016 12% 16% 47% 21% 3% 1% 1% 13% 25% 43% 12% 6% 14% 3% 31% 47% 5% Up More Than 50% Up 30 to 50% Up 10 to 30% Up 1 to 10% Unchanged Flat to Down 5% Up More Than 10% Up 6 to 10% Up 1 to 5% Unchanged Drop 1 to 10% Drop by 10% or More Major Disruption Some Disruption No Change Major Improvement Some Improvement Trans-Pacic contract rate expectations Do you expect the Trump administration to follow through with protectionist promises damaging to containerized trade growth — at sea and on NAFTA borders? How much to you expect your containerized shipments to change in 2017 compared to 2016? Do you expect more container line consolidation in 2017? Yes - 78% No - 9% Not sure- 13% Not sure- 40% How much do you expect your 2017-2018 trans-Pacific contract rates to change from 2015-2016? How much to you expect your containerized shipments to change in 2017 compared to 2016? 12% 16% 47% 21% 3% 1% 1% 13% 25% 43% 12% 6% 14% 3% 31% 47% 5% Up More Than 50% Up 30 to 50% Up 10 to 30% Up 1 to 10% Unchanged Flat to Down 5% Up More Than 10% Up 6 to 10% Up 1 to 5% Unchanged Drop 1 to 10% Drop by 10% or More Trans-Pacic contract rate expectations How much to you expect your containerized shipments to change in 2017 compared to 2016? How much do you expect your 2017-2018 trans-Pacific contract rates to change from 2015-2016? How much to you expect your containerized shipments to change in 2017 compared to 2016? 12% 16% 47% 21% 3% 1% 1% 13% 25% 43% 12% 6% Up More Than 50% Up 30 to 50% Up 10 to 30% Up 1 to 10% Unchanged Flat to Down 5% Up More Than 10% Up 6 to 10% Up 1 to 5% Unchanged Drop 1 to 10% Drop by 10% or More Major Disruption Some Disruption No Change Major Improvement Some Improvement Trans-Pacic contract rate expectations How much to you expect your containerized shipments to change in 2017 compared to 2016? Do you expect more container line consolidation in 2017? Not sure- 13% How much do you expect your 2017-2018 trans-Pacific contract rates to change from 2015-2016? How much to you expect your containerized shipments to change in 2017 compared to 2016? 12% 16% 47% 21% 3% 1% 1% 13% 25% 43% 12% 6% 14% 3% 31% 47% 5% Up More Than 50% Up 30 to 50% Up 10 to 30% Up 1 to 10% Unchanged Flat to Down 5% Up More Than 10% Up 6 to 10% Up 1 to 5% Unchanged Drop 1 to 10% Drop by 10% or More Major Disruption Some Disruption No Change Major Improvement Some Improvement Trans-Pacic contract rate expectations Do you expect the Trump administration to follow through with protectionist promises damaging to containerized trade growth — at sea and on NAFTA borders? How much to you expect your containerized shipments to change in 2017 compared to 2016? Do you expect more container line consolidation in 2017? Yes - 78% No - 9% Not sure- 13% Not sure- 40% How much do you expect your 2017-2018 trans-Pacific contract rates to change from 2015-2016? How much to you expect your containerized shipments to change in 2017 compared to 2016? 12% 16% 47% 21% 3% 1% 1% 13% 25% 43% 12% 6% 14% 3% 31% 47% 5% FREIGHT EXPECTATIONS

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