Zim Integrated Shipping Services, the 11th largest ocean carrier in the world, is adding service to Jacksonville. The Israel-based company will come to Jacksonville as the vessel operator for 2M, one of the four largest vessel-sharing alliances in the world.
The new service will bring more containers from North Asia through Jaxport, which has placed an emphasis on Asian container imports, netting average annual growth of 21 percent over the last five years.
For Jaxport, Zim’s arrival further diversifies its ocean carriers and adds momentum to its growing container business. Container volumes year-to-date are up 28 percent compared to last year, and the volumes that went through Jaxport in July and August were the highest of any July and August in the port authority’s history. Its existing ocean carriers also increased their average capacity at Jaxport by almost 13 percent in August.
For Zim, adding Jacksonville as a port-of-call is another new step for the independent carrier, which is wrestling with the same operational challenges the ocean carrier industry is facing. Despite volume and revenue increases, Zim and other ocean carriers have often netted quarterly losses in the face of oversupply, declining rates and increasing costs, Zim USA President George Goldman told the Jacksonville Propeller Club Oct. 3. The world’s top 11 carriers lost money 25 out of the last 42 quarters, according to Goldman.
“That’s not really sustainable,” said Goldman, who noted the industry has seen a number of acquisitions, mergers and bankruptcies.
Many of the industry’s operational challenges are self-inflicted, especially the industry’s oversupply, Goldman conceded. He presented a slide calling the industry collectively “dumber than a bag of rocks.”
“Individually, we’re pretty smart people,” said Goldman. “The problem is when we get together… Without a doubt, we are our own worst enemies.”
Zim’s approach has been to toe the line between alliances and its status as an independent carrier. It operates its own vessels and doesn’t belong to any shipping alliance formally, but it does partner with some alliances like 2M in certain regions. In the U.S., the carrier is focused on ports east of the Mississippi, especially the South Atlantic, according to Goldman. It added Wilmington, North Carolina, as a port of call as well, and is leaving New York to larger carriers.
Goldman expressed optimism for the second half of the year, despite Zim’s struggles in the first half of 2018. Despite carrying record volume in the second quarter, Zim has lost $67.3 million in the first six months of the year. Goldman is confident Zim’s role in the South Atlantic and sees opportunities to bring a wider range of containers to Jacksonville in the future, but he acknowledged the industry continues to face challenges and is prone to further consolidation.
“If you’re a customer, that’s going to affect you,” said Goldman. “If you’re a tugboat operator, that’s going to affect you. If you’re Jaxport, that’s going to affect you