Thursday Nov 14, 2024
Thursday Nov 14, 2024
Tuesday, 16 April 2013 00:00 - - {{hitsCtrl.values.hits}}
COPENHAGEN (Reuters): Rates for shipping container freight from Asia to Northern Europe fell by more than 12% this week to a 14-month low, data from Chinese shipping Net showed, a level at which most shipping firms lose money.
The Shanghai Containerized Freight Index fell to US$ 940 per 20-foot container on Friday from US$ 1,070 a week ago and is down from an average 2012 level of US$ 1,378. The container shipping industry has struggled to turn a profit in recent years due to overcapacity and the global economic slowdown, which has meant lacklustre demand.
The data contributed to a 4.3% fall in shares of Danish conglomerate A.P. Moller-Maersk, which owns the world’s biggest container shipping company.
“To make things worse, some carriers have deferred their 15 April rate increases until 1 May, which will see rates continuing to slide south over the coming two weeks,” Cherry Wang, a container derivatives broker at ACM/GFI Group in London said. Denmark’s Maersk Line said it would postpone a scheduled US$ 500 rate hike on cargo bound for Europe.
“We can see that other shipping companies have postponed announced rate hikes. We can’t stand alone for two weeks,” Maersk Line’s Asia-Europe trade head Lars Mikael Jensen said, adding that most firms are losing money at current rates. Market capacity could increase further later this year when the first of Maersk’s 20 new mega vessels is delivered by Korea’s Daewoo Shipbuilding and Marine Engineering. “We expect a 10% increase in capacity this year in a market with no growth. Shipping companies need to remove capacity,” Lars Jensen said, who heads maritime analysis company SeaIntel. But A.P. Moller-Maersk’s board chairman Michael Pram Rasmussen, disputed this estimate and said the company would retire older ships as it brings on new vessels.
“The Triple-E is a modern, efficient vessel with low fuel consumption, low unit costs and significantly lower CO2 emissions per container. The newly added capacity will make it possible for us to reduce other tonnage,” he said.
“The result is that we will introduce the Triple-E vessels without significantly shifting the market balance.” A.P. Moller-Maersk shares were down 1,880 crowns at 13.40 GMT, also partly because of a dividend payout of 1,200 crowns.
