Maersk cautiously optimistic on 2011 demand

Maersk Line, the world's largest container vessel operator, said it was cautiously optimistic about demand for container goods next year, reported the Manila Bulletin.

Rates to carry containers are "pretty much back to where we were before" the slowdown in 2008, Tim Smith, chief executive officer for the Copenhagen-based shipping line's North Asia region, said. Maersk will adjust capacity to meet the seasonality in demand, he added.

Maersk Line cut costs to improve profitability and added capacity in Asia as economic growth in the region spurs demand. The shipping industry posted a loss last year as rates tumbled because of overcapacity and slowing demand in the US and Europe.

"Rates will likely stabilise next year, and there will still be demand growth," said Jack Xu, an analyst at Sinopac Securities Asia. "The state of the global economy is still the core issue in determining if the demand growth is sustainable."

A P Moeller-Maersk returned to profit in the first half, posting net income of US$2.3 billion, compared with a net loss a year earlier.

"Looking into 2011, we're cautiously optimistic, economies are going to continue improving but the pace of the recovery is going to slow," Smith said. "We just need to be as agile as we can and try and keep a close check on how demand and supply is keeping up."

The shipping market contracted in 2009 for the first time since containerizstion became globalised in the 1970s, even as capacity grew with new ships, ordered in previous years, coming into service. Maersk Line lost a record $2.09 billion last year.

A larger-than-expected jump in shipping demand in the second and third quarters prompted lines to reactive idled vessels to relocate empty containers and impose extra surcharges to offset the costs.
(Source:www.cargonewsasia.com)