Orient Overseas (International) Ltd., Hong Kong's largest container line, may cut capacity 16 percent as demand to transport Asian-made computers and toys slows.
"There is no doubt we're heading for a very tough market," Chief Financial Officer Ken Cambie said today adding that the cut may be considered only in the "worst-case" scenario. The company is currently in talks with partners in the Grand Alliance on whether to idle ships, Cambie said in Singapore.
Global growth is headed for a "major downturn" next year, as U.S. gross domestic product growth may slow to 0.1 percent, the International Monetary Fund said last week. Mitsui O.S.K. Lines Ltd. and Kawasaki Kisen Kaisha Ltd. are among shipping lines that have announced cuts in capacity as demand declines.
Container rates have plunged and shipping lines are idling vessels as the credit crunch and a wider economic slowdown damps demand for Asian-made toys, clothes and furniture in the U.S. and Europe. The New World Alliance will cut two regular services to the U.S. West Coast from Asia by the end of this month, reducing capacity on the route by 18 percent, Lloyd's List said on Oct. 9.
The grouping may also cut capacity from Asia to the U.S. East Coast and to Europe, Lloyd's List said, citing an unidentified Mitsui O.S.K. Lines Ltd. official. Neptune Orient's APL Ltd. and Hyundai Merchant Marine Co. are also part of the alliance.
"There is no doubt we're heading for a very tough market," Chief Financial Officer Ken Cambie said today adding that the cut may be considered only in the "worst-case" scenario. The company is currently in talks with partners in the Grand Alliance on whether to idle ships, Cambie said in Singapore.
Global growth is headed for a "major downturn" next year, as U.S. gross domestic product growth may slow to 0.1 percent, the International Monetary Fund said last week. Mitsui O.S.K. Lines Ltd. and Kawasaki Kisen Kaisha Ltd. are among shipping lines that have announced cuts in capacity as demand declines.
Container rates have plunged and shipping lines are idling vessels as the credit crunch and a wider economic slowdown damps demand for Asian-made toys, clothes and furniture in the U.S. and Europe. The New World Alliance will cut two regular services to the U.S. West Coast from Asia by the end of this month, reducing capacity on the route by 18 percent, Lloyd's List said on Oct. 9.
The grouping may also cut capacity from Asia to the U.S. East Coast and to Europe, Lloyd's List said, citing an unidentified Mitsui O.S.K. Lines Ltd. official. Neptune Orient's APL Ltd. and Hyundai Merchant Marine Co. are also part of the alliance.