‘I don’t think anyone expected that it was going to turn so quickly’ – Stephanie Loomis
Rhenus Logistics’ Head of Ocean Freight Americas spoke about the current market and future of her industry on the Venari Podcast
‘I jokingly tell people here we're probably the largest, greatest logistics provider you may have never heard of,’ Stephanie Loomis says with a smile. ‘But we’re hoping to change that soon.’ Stephanie, who leads Rhenus Logistics’ Americas division, does qualify her statement by noting that the company is very well-known in Germany – where it was established over 100 years ago – as well as Asia, which is a principal market for them. Rhenus only set up US and Canadian operations in 2018, the timing of which, Stephanie is quick to admit, was tricky. Now, two years on from the lifting of COVID restrictions, Stephanie is ready to relaunch and hit the ground running – as she told our Transport & Logistics Senior Consultant, Gov Kandola, on a recent episode of the Venari Podcast.
Container costs down amid market uncertainty
Rhenus’ Americas arm has moved into a large sales force quickly – but while things have begun to stabilise after two years of astronomical shipping container costs, the ocean freight market remains ‘uneasy’ and’ trepidatious’, in Stephanie’s words. ‘I think anybody that knows the industry well knew that we were going to come back to some kind of normalcy from those sky-high rates [...] But I don't think anyone really expected that it was going to turn so quickly.’ The easing of the congestion that had plagued the shipping industry is a large factor; during the pandemic, carriers used absolutely all vessels at their disposal, including ships that likely hadn’t seen service for many years. ‘As that congestion eased, we started quickly to see that we actually had more capacity than volume, because obviously volume started to decrease as economic conditions changed,’ Stephanie notes. ‘There was fear of recession, and inflation, and interest rates started to go up. And so people stopped purchasing quite as many goods’. From deep congestion issues, the industry suddenly had an overcapacity problem, which caused freight rates to drop – ‘pretty aggressively’, in some trade routes.
Is there a price war on the horizon? Stephanie believes so: she points to the dissolution of market leaders Maersk and MSC’s ‘2M Alliance’ as further evidence. ‘The joke in the industry always was that these carriers were like dominoes. If one goes, they all go. So, it's very hard for a carrier to hold out when freight rates start to fall [...] It's like a snowball racing down a hill, and without them pulling enough capacity out in the market, there's just no way for them to stop the slide.’
Sustainability is a hot topic
It’s not just rates that are shifting. Growing concerns about climate change have reached the shipping industry, with more and more customers – especially younger ones – asking what Rhenus and other shippers are doing to reduce carbon emissions. Stephanie points to increasing numbers of carriers, including Rhenus, offering carbon footprint tracking services and less-than-container (LCL) lines, while Rhenus’ intra-Asia programme is ‘almost 100% carbon-free’. Still, she concedes that making the industry more sustainable is a complex undertaking that will require a lot of work – not just from shippers, but from port operations and sovereign nations, too. While the process may take some time, Stephanie notes that ‘the carriers recognise that they're the front end of this, because obviously it's those ships that are burning the fuel.’
New approaches – and new blood – needed in the industry
With price uncertainty on the one hand, and questions around the industry’s environmental impact on the other, you might think that these factors would translate into a lull in the amount of talent coming into shipping – but that isn’t necessarily the case. Odd as it may sound, Stephanie notes that ‘the pandemic probably was the best thing that ever happened to supply chain and logistics’ in terms of career visibility, ‘because more and more people finally figured out, “Oh, that's what you do! You're involved in that mess.”’ She’s a longstanding advocate for clearer signposting around working in this area, admitting that she had no idea what logistics was until she answered a job advert in the newspaper – an avenue, as Stephanie notes herself, that doesn’t even really exist anymore.
Nonetheless, on starting her career, she ‘absolutely fell in love with it. I mean, the intricacies and the complexities – there's never a dull moment, as we all know’. But the business is changing, and while Stephanie notes that ‘it’s in a pretty good place’, the increasing focus on tech for logistics solutions means she is vocal about the need for ‘more tech-savvy employees and more people that think about things a little bit differently than the old guard [...] I still think we have more to do as an industry to get ourselves out there as a viable, really good career option for young people.’