for container shipping
THE container shipping business is
expected to grow below 6% next year due to the US recession and the
contraction in the European market.
Maersk Line Malaysia country
manager Omar Shamsie said the liner business should see a growth
rate of between 5% and 6% this year.
“The outlook for container shipping
and world trade is very uncertain due to the developments in both
the world economy and the financial markets,” he told StarBiz.
“Consumers in the US and Europe are
now holding back and we can expect to see the decrease in demand
continue for quite some time,” he said.
Container shipping has seen
significant growth over the last 30 years, with the yearly growth
rate being 10% on average.
Omar said that even during the
worst downturn in 2001, the growth rate was 4%, while in the best
years, the shipping industry had enjoyed a double-digit rate.
“The coming months will be tough
but Maersk Line is prepared and will try first and foremost to hold
on to our current business,” he said.
Omar said container liners had
already been taking steps to counteract the negative effects of the
downturn, with many shipping companies, including Maersk Line,
reducing capacity on the Asia-Europe routes.
“The recent Far East Freight
Conference figures have shown Asia-to-Europe trade shrinking by 2.7%
during the third quarter.
“Many companies are also talking
about vessels’ lay-ups. While Maersk Line has not laid up any
vessels, it is not improbable that we will have to lay up a number
of container vessels to further reduce our capacity,” he said.
However, he added that Maersk Line,
which was part of the strong A.P. Moller–Maersk Group, should remain
strong as its employees and organisations were tuned in to handle
“Our streamlining initiatives will
make our company more robust as we work closely with our customers,”
On the prevailing trend in the
industry in the current market condition, Omar said that as the
container shipping industry remained very fragmented with many small
and few large carriers bidding for the same business, consolidation
would be inevitable.
Maersk Line, Omar said, it was also
continuously optimising its routes in light of the market
“We will do this via changing
routes and consolidating them as well as economical sailing, calling
other ports and – not least – by looking at costs everywhere.
“Reducing capacity will no doubt
help the situation but with the current US recession expected to be
longer and deeper, shipping lines will likely remain affected,
especially the smaller players,” he said.
On the temporary removal of its AE8
service from its Asia-Northern Europe network due to the drop in
demand last month, Omar said it would not affect Malaysian ports.
“This is because the AE8 service
port calls have been included in our other services on the
“The changes to this service mean
that we can continue to serve our corridor combinations and plan for
investment when the trade picks up.
“Also, our customers will benefit
from more direct calls from Asia to the Mediterranean with improved
transit times,” he said.
The temporary removal has resulted
in the reduction of 7,600 20-ft equivalent units from its weekly