'Amazing' surge highlights today's lack of megaships: Widdows

NEPTUNE Orient Lines (NOL) chief executive Ron Widdows spoke of the "amazing" surge in demand that has led to a lack of 6,000-TEU plus ships, leaving leave smaller vessels still idle.

Mr Widdows said his company will soon order ships in 10,000-TEU plus range, something unconceivable last year when the market was flooded with excess capacity of post-panamax vessels.

Mr Widdows, while attending the International Transport Forum 2010 in Leipzig, told American Shipper that despite some absorption of excess capacity, slow steaming was here to stay even with freight rates likely to spike on the back of growing demand.

"I know that there are people that think as business starts to pick up, rates start to move up, the foot goes down on the pedal and ships speed up," he said. "I don't think so. The economics associated with slowing down are really compelling."

Shippers' are not adverse to slow-steaming with its increased transit times as long as it comes with reliability and less volatility in pricing rates "that move in a narrower band," he added.

Freight rates on renewed contracts for transpacific trade routes have been met largely with satisfaction but he acknowledged that breaking even for carriers is not enough. "You have to generate enough of a return so you can invest in the assets to handle more business."
(Source:www.schednet.com)