“The decline we are seeing in recent weeks is faster and deeper than what most people had expected only a few months ago.”

From The Times
December 10, 2008
Maersk Line warns shipping industry needs a lifebelt
Carl Mortished, World Business Editor

It was the one industry geared for huge volume growth. From China alone, annual double-digit percentage increases in trade had been the norm in the shipping world.

But a sudden and sharp slowdown in global trade is hurting the cashflow of container shipping companies. The situation is so critical that a senior executive of Maersk Line said that the accelerating traffic decline could push a big group over the edge next year.

Maersk, the world’s leading container shipping line, has slashed the rates it charges for transporting containers on its Asia-America routes and last week the Danish company said that it was laying up eight vessels amid worsening market conditions.

The eight ships, each with a capacity for 6,500 containers, will remain at anchor, probably in the Far East, until next summer. They are unlikely to represent the last capacity cut for the shipping giant, Michel Deleuran, head of network and product at Maersk, said: “We are certainly seeing a dramatic slowdown. The decline we are seeing in recent weeks is faster and deeper than what most people had expected only a few months ago. If we don’t see improvements, we will be laying up more.”

 

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