EMEA News
Shipping Capacity Predicted to Outpace Demand in 2013
Shipping services company Clarkson Plc. predicts that volumes for global container lines will rise 6.6 percent year-over-year, to 168 million twenty-foot equivalent units (TEU) in 2013, but industry capacity will grow faster, keeping pressure on rates, Bloomberg reports.
For ships on mainline Asia-Europe routes, Clarkson predicts only 4 percent growth to 21 million TEU due to tough economic conditions in Europe.
The economic impact of the European debt crisis is putting pressure on large shipping companies like Maersk Line and CMA CGM SA, since Europe accounts for more than a third of global trade.
A forecasted 7.5 percent increase in industry capacity will make it difficult for container lines to maintain rate increases implemented this year, the report says.
"Unless Europe has an unexpected recovery, growth volumes from Asia to Europe are likely to be low," Lars Jensen, chief executive officer of Copenhagen-based SeaIntel Maritime Analysis told Bloomberg.
"Consequently we expect the structural overcapacity to persist in 2013, leading to rapid cycles of price increases and price declines as carriers intermittently idle and re-activate tonnage."
Clarkson estimates that world freight traffic grew 4.8 percent this year, down from 7.1 percent in 2011.
Maersk spokesman Hursh Joshi told Bloomberg the company estimates single-digit growth in global container volumes in 2013.
In September, Malaysia's Mayback Kim Eng (Maybank) predicted a demand-led recovery of the container shipping business, anticipating U.S. and European government interventions to help the global economy.
Major shipping companies have been looking for ways to respond to the difficult market, including a recent announcement by Germany's two largest containers shipping companies, Hapag-Lloyd AG (Hapag-Lloyd) and Hamburg Südamerikanische Dampfschifffahrts-Gesellschaft KG (Hamburg Süd), that they are considering merging.
