[210312.EN.SEA] Prepare For Reduced Container Shipping Growth Rates, Maersk CEO Warns

CONTAINER shipping lines have idled five per cent, or 800,000 TEU, and more lay-ups are to come, says Maersk Line new CEO Soren Skou, who expects a million TEU to be laid up, a level not experienced since downturn year of 2009, said Reuters.

Mr Skou said growth would slow to five to eight per cent, a steep fall from the 10 to 11 per cent enjoyed since the mid-1980s because of faltering western economic activity bringing with it a slowdown in Asian production.

"Demand growth will be less than what it was in the past," Mr Skou said. We are not ruling out laying up ships over the summer if the market is growing less than expected."

Maersk has already removed 9.5 per cent of its Asia-Europe capacity and has decided against ordering 10 more 18,000-TEU (Triple-E) ships and says it will continue to retain 15.5 per cent market share despite cuts.

Maersk can withdraw another nine per cent as the contracts for 20 per cent of its chartered vessels are due to expire this year, Mr Skou said.

The container shipping industry, which lost an estimated US$5.2 billion last year, according to Drewry Shipping Consultants, is starting to lay-up ships to support increased rates.

In 2011, average freight rates were eight per cent lower than 2010 while bunker prices increased 35 per cent, said Maersk.

Source : HKSG.