Prepare for a rough ride, warns Maersk
HAMBURG 26 September – Liner shipping faces a tougher trading environment than it has been expecting, warned Jorgen Engell, executive VP of AP Møller-Mærsk Group, yesterday. Speaking at a ship finance conference in Hamburg, Engell said the company was expecting demand growth to slow from the current 10% a year to 8% in 2007 and 2008. This is well short of the growth in global container transport capacity, at 16% this year, 15% in 2007 and 13% in 2008. He said a description of the container supply/demand balance as “finely balanced” by Howe Robinson managing director Peter Kerr-Dineen was optimistic, and stressed that demand is clearly lagging behind supply. In a thinly-veiled attack on German KG (limited partnership) houses, Engell pointed the finger at “private investors who don’t know much about shipping and financial institutions that aim to diversify their portfolios” for the build-up of tonnage. His sombre outlook adds fresh impetus to fears of a further decline in freight rates in the Asia-Europe trade. The market is about to face consolidation “the hard way”, he warned, with operators being forced out of business.