Feeder operators: Increasing capacity could upset recovery

FEEDER operators have cautioned against any sudden increase in tonnage, which they say would stymie the recovery in the container sector. Analysts however are not so sure.

Doom sayers, such as Singapore feeder, Sea Consortium, fear that any move by main line operators to re-introduce laid-up vessels and abolish slow steaming activities - the operating of ships several knots below their top speed to reduce fuel costs and soak up extra capacity - would upset the delicate supply and demand balance that currently allows carriers to benefit from high spot-rates, which as of January exceeded US$2,000 per TEU.

In an interview with London's International Freighting Weekly, Bengal Tiger Line CEO, Bill Smart, said that the flow of tonnage into lines traditionally operated by feeders could have negative repercussions on the industry, adding that pending orders for large vessels would further fuel the potential of another supply glut, as was seen at the start of 2009.

Analysts from Dynamar however indicated that they did not expect to see any tonnage increases in the near future, as, of the vessels that were brought back into service, most were merely being used to mop up containers left behind on Asia-Europe routes due to lack of capacity.

(Source: www.schednet.com)