News
- Maersk Says Box Market to Grow in 2010
- 11/19/2009
Maersk CEO Says Box Market to Grow in 2010
Peter T. Leach | Nov 18, 2009 2:28PM GMT
The Journal of Commerce Online - News Story
Container volumes are likely to grow by 3 percent to 8 percent in 2010 as the market emerges from the first year of contraction since containerization went global in the 1970s, Kolding said in an interview with Bloomberg News.
“The trends are pointing the right way,” said Kolding. “Volumes are a little bit better than expected and rates are also going up. We still have some way to go, and we also have to get costs down some more.”
Global container volumes are headed for a 10 percent drop this year, Kolding said, prompting shipping companies to postpone orders for new vessels, idle existing ones and sail at slower speeds to rein in capacity. The measures mean that average freight prices that fell 30 percent in the first nine months may next year be level or slightly up from 2009, he said.
The container market will reach a “healthy” balance between supply and demand -- equal to conditions before the financial crisis -- by 2013, Kolding said. That’s two years earlier than he had estimated in June.
Container lines with a lower cost base will be profitable before 2013, though none of the world’s 25 largest container lines will make money this year, the CEO said.
“The key element is to have a good cost structure,” Kolding said. “We hope we’re a leader on that front and therefore will be one of the market participants that first cross the important line of becoming profitable again.”
Maersk Line, which operates almost 500 vessels, applied this month to rejoin the Transpacific Stabilization Agreement, a discussion agreement that includes 14 of the company’s largest competitors, saying it is necessary to work with competitors to restore profitability to the industry.
“Our market share is not large enough for us to go out on our own and lift rates,” Kolding said. “We need the other market players to do it with us.”
Maersk Line, whose parent, A. P, Moller-Maersk, is Denmark’s largest company will have cut 6,500 jobs from its 25,000-strong work force by the end of this year, Kolding said, with more positions to be eliminated in 2010.