Global container shipping lines are anticipating losses for the full year 2011 and bracing for a gloomy 2012 marked by high costs, vessel glut, dwindling demand, and a depressed world economy.
Industry analysts and operators at a recent maritime and logistics services conference noted that since the third quarter of the year, most container carriers have been reporting losses due to plummeting freight rates, weak demand in traditional markets, and an oversupply.
The shipping sector is in for a rough ride next year, they said, due to the European debt crisis, higher operating costs, and the political gridlock in the U.S. over federal deficits.
Global shipping, which is considered a barometer for global trade, has also struggled with the entry of new ships ordered during good times in 2007 and 2008, which has created an oversupply and plunged freight rates to unprofitable levels this year.
Denmark-based Maersk Line, the biggest container ship operator, is planning to sideline some of its vessels, particularly those on the Asia-Europe routes, after registering a loss for the third quarter.
Earlier, it announced that it is combining some of its routes from Asia to Europe owing to sliding freight rates.
OOCL, Hong Kong’s biggest container line, has already cut its Asia-Europe route capacity by 20 percent in response to higher fuel prices and lower demand.
Malaysia’s MISC said last week that it is leaving the boxline industry to concentrate on its core operations after losing $789 million in three years. Chilean shipping company CSAV is said to be planning the sale of its container shipping business after two straight losses in the second and third quarters.
Trans-Pacific prospects are more encouraging as the U.S. economy displays signs of slowly recovering, and some carriers have withdrawn capacity from the region, the experts said.
