Container shipping to sink to new lows, Maersk warns

 
AP Moller-Maersk chief executive Nils Andersen has warned that container shipping volumes – and freight rates – are facing a significant decline in 2009, while Drewry Shipping Consultants predicts container shipping is facing its worst year ever, with even the biggest lines not safe from the risk of collapse.
 
While Mr Andersen would not say how much global container volumes would contract in 2009, he made it clear that the industry was in for a rough ride, which was likely to last well into 2010, Lloyds List reports.
 
“It’s fair to say 2009 will be very tough, and probably 2010 will be very tough as well. If the improvement comes before the end of 2010 we will be positively surprised,” he said.
 
“I think the freight rates now are really very low, so that means there is a bottom to how far they can fall, but you also have to be a little bit careful and not expect a big swing back in rates,” he said.
 
“The present rates will not allow lines to sustain operations on a long-term basis”, but he refused to comment on whether the tough conditions would result in some lines going under.”
 
Weakening global demand has prompted Maersk to lay up eight containerships but the shipping line is not planning a large-scale withdrawal of tonnage.
 
At the same time, Drewry Shipping Consultants is warning that further casualties “are a real possibility”, after four small carriers have already failed.
 
The most vulnerable are probably smaller regional Asian players, but the experience of motor manufacturers has shown that even industry giants can be brought down by this recession, Drewry’s said.
 
The forecaster estimates that global container traffic totalled 153m TEU last year, up 7.2% from 2007. This year, growth is expected to slow to just 2.8%, with a few isolated trades such as the Asia-Middle East and Asia-Africa corridors likely to post some positive figures.
 
But the big east-west routes are in terrible shape, with Drewry forecasting that the Asia-Europe trade will shrink by 4.1% in 2009, following growth of just 1.9% in 2008.
 
MREC HERE

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