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The container shipping
business is expected to grow below 6% next year
due to the US recession and the contraction in
the European market.
Maersk Line Malaysia country manager Omar
Shamsie said the liner business should see a
growth rate of between 5% and 6% this year.
“The outlook for container shipping and world
trade is very uncertain due to the developments
in both the world economy and the financial
markets,” he told StarBiz.
“Consumers in the US and Europe are now holding
back and we can expect to see the decrease in
demand continue for quite some time,” he said.
Container shipping has seen significant growth
over the last 30 years, with the yearly growth
rate being 10% on average.
Omar said that even during the worst downturn in
2001, the growth rate was 4%, while in the best
years, the shipping industry had enjoyed a
double-digit rate.
“The coming months will be tough but Maersk Line
is prepared and will try first and foremost to
hold on to our current business,” he said.
Omar said container liners had already been
taking steps to counteract the negative effects
of the downturn, with many shipping companies,
including Maersk Line, reducing capacity on the
Asia-Europe routes.
“The recent Far East Freight Conference figures
have shown Asia-to-Europe trade shrinking by
2.7% during the third quarter.
“Many companies are also talking about vessels’
lay-ups. While Maersk Line has not laid up any
vessels, it is not improbable that we will have
to lay up a number of container vessels to
further reduce our capacity,” he said.
However, he added that Maersk Line, which was
part of the strong A.P. Moller–Maersk Group,
should remain strong as its employees and
organisations were tuned in to handle changes.
“Our streamlining initiatives will make our
company more robust as we work closely with our
customers,” he said.
On the prevailing trend in the industry in the
current market condition, Omar said that as the
container shipping industry remained very
fragmented with many small and few large
carriers bidding for the same business,
consolidation would be inevitable.
Maersk Line, Omar said, it was also continuously
optimising its routes in light of the market
developments.
“We will do this via changing routes and
consolidating them as well as economical
sailing, calling other ports and – not least –
by looking at costs everywhere.
“Reducing capacity will no doubt help the
situation but with the current US recession
expected to be longer and deeper, shipping lines
will likely remain affected, especially the
smaller players,” he said.
On the temporary removal of its AE8 service from
its Asia-Northern Europe network due to the drop
in demand last month, Omar said it would not
affect Malaysian ports.
“This is because the AE8 service port calls have
been included in our other services on the
Asia-Europe routes.
“The changes to this service mean that we can
continue to serve our corridor combinations and
plan for investment when the trade picks up.
“Also, our customers will benefit from more
direct calls from Asia to the Mediterranean with
improved transit times,” he said.
The temporary removal has resulted in the
reduction of 7,600 20-ft equivalent units from
its weekly network capacity. |
