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Going Global Keep an eye on shipping #8212 ‘The industry is undergoing profound changes’

Taking a small to medium-sized business and placing it into the global marketing environment presents unique challenges for each company.

With an eye on that fact, Sobel & Co. hosted a networking event at its offices for both seasoned and emerging global players.

Sam Ruda, assistant director of port business development at the Port Authority of New York and New Jersey, told those in attendance that the confusion and uncertainty is more than understandable. The landscape, he said, is cloudy.

“It’s an interesting time to be in this business, whether you’re on the port side, the logistics side or the holders that are involved,” he said. “The industry is undergoing profound changes.”

These include major bankruptcies and mergers and acquisitions.

“Three Japanese carriers are going away and are essentially being rebranded as one,” he said.

Ruda said this shifting landscape begs one question: “What does it all mean?”

Well, for one, it means less carriers. And what does that mean? Ruda thinks it’s going to mean a higher cost for shipping goods.

“There will come a point in time when a smaller number of large carriers will probably have a lot more pricing power and you can see a scenario where rates will probably go up,” he said.

He said this activity is similar to the mergers and acquisitions that occurred in the airline industry.

Little bridge has big impact on global market
Sam Ruda, assistant director of port business development at the Port Authority of New York and New Jersey, spent the last 12 years working at the port in Portland, Oregon, before coming to the area earlier this year.
Speaking at Sobel & Co.’s annual international business networking event, Ruda said he was happy to take on what he calls the “problems of abundance” of the tri-state area in his new role.
One such issue is the $1.3 billion project to raise the height of the Bayonne Bridge to allow larger ships entry into the ports.
“When that bridge is completed, we’re going to see the big ships,” he said. “We talk to carriers all the time, and the only thing they want to talk to the Port Authority about right now is the bridge.”
Ruda said he found it amazing that this “little bridge in Bayonne” is driving global deployment strategies.
“(It) has big impacts on the global charter market, when ships are built, ordered or delivered,” he said. “So, it’s a pretty amazing thing that we really have made ourselves relevant in the global trade.”  — Andrew Sheldon

“The closest guide we have to how people should start thinking about this is probably our own domestic airline industry,” he said. “As we all know, the days of cheap airline tickets are over and that whole merger and acquisition activity took place in, roughly, a 15-month time frame.”

The remaining question is when the stars will align to allow this kind of activity in the shipping industry.

“We’re not there yet,” he said.

Still, despite a forecast of raising costs, Ruda said he is optimistic for the future of the industry.

“I’m optimistic about the future,” he said. “It’s today that’s keeping me awake.”

E-mail to: andrews@njbiz.com
On Twitter: @sheldonandrewj

Andrew Sheldon
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