Maersk expects slowing box demand
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Maersk Line, the world's largest container vessel operator, said the global shipping industry may have to cut box cargo capacity from the fourth quarter as demand growth slows at U.S. and European retailers.
"Demand for shipments in the fourth quarter might be a bit softer, and certainly after Chinese New Year it'll be quiet again," Tim Smith, chief executive officer for the Copenhagen-based shipping line's North Asia region, said in an interview in Hong Kong yesterday. "We need to be careful during those periods and maybe that's when it's time for us to take some capacity out."
A.P. Moeller-Maersk returned to profit in the first half after cutting costs and adding capacity in Asia where economic growth spurred demand. U.S. and European retailers may start to expand stockpiles more slowly after rebuilding inventories to meet rising demand for Asian-made toys, clothing and furniture, Smith said.
The parent company lifted its full-year earnings forecast last month as demand helped push up freight rates. Fees to carry containers are "pretty much back to where we were before" the slowdown in 2008, Smith said.
A larger-than-expected surge in shipping demand in the second and third quarters prompted lines to deploy idled vessels to relocate empty containers and impose extra surcharges to offset the costs.