MAERSK Line CEO Soren Skou, predicts global box traffic will rise three to five per cent in 2016 while a nine per cent capacity increase will hammer freight rates.
Speaking at the shipping group's annual Capital Markets Day, Mr Skou said this year's growth would be two to four per cent but higher next year, reported Lloyd's Loading List.
"The only rational thing for lines to do is to take capacity out" despite the flood of new mega-ships that have been coming on line.
He also saw an on-going 'unprecedented bloating of global containership order books", including many eye-popping orders by Maersk.
The carrier is scrapping 30 scheduled container shipping services in the coming months.
This more than double the capacity extraction of the same period last year. It includes cutting the main AE9 loop, and one of its West Central Asia-Europe services, reducing capacity on that trade by 16 per cent.
Its ME5 service, linking the western Mediterranean, Red Sea and Horn of Africa with India, is being discontinued next month, and to compensate port calls would be added to its ME1, ME2 and ME3 services, while a dedicated feeder shuttle between Chennai, Colombo and Salalah will be launched.
Source : HKSG.