Hanjin Shipping, one of the top three operators of the key Asia-U.S. route, expects the global container shipping industry to start to recover next year and to rebound in 2011, a senior executive said on Wednesday. Global container carriers are reeling from a collapse in freight rates and steep overcapacity as trade volumes have declined sharply since the second half of last year.
Shipping volumes on the crucial Asia-U.S. and Asia-Europe routes are expected to show a decline for the full year, said Hanjin, which ships to major U.S. retailers such as Wal-Mart Stores and Target.
"Carriers will have to focus on risk management, cutting costs and minimising losses," Harry Shin, senior vice president overseeing Hanjin's global accounts, said in an interview with Reuters.
"This year will be about how to survive, not how to make money."
An opportunity for freight rate increases in key routes could come around April once shipping volumes recover on seasonality, Shin said.
"There are hopes that shipping volumes in the retail sector could recover in the second half, once inventories are exhausted."
Leading container shipping firms are idling vessels in an effort to curb falling freight rates. Total global container capacity has fallen by 11 percent as of January compared to last year, according to Hanjin, the world's No. 10 container operator.
Hanjin and its alliance partners, China's COSCO Container Lines, Japan's K-Line and Taiwan's Yang Ming Line, reduced their combined capacity by 25 percent sinec late 2008 by laying up vessels. Shin said Hanjin is also working on reshuffling routes to stay profitable.
The company also might delay some future container ship deliveries depending on market conditions, he added.
Hanjin has no major deliveries due this year and will start to receive previously ordered large container ships in 2010.
Hanjin, which trails global container giants such as Danish shipping firm Maersk, Mediterranean Shipping Co and CMA CGM, plans to include more north-south trade routes and focus on profitability, Shin said.
Hanjin is seeking to grow new businesses to diversify its container shipping-focused business portfolio, such as third-party logistics including inland shipping and terminal developments. It is also slated to open a ship repair yard in China this year, Shin said.
Hanjin shares rose 3.37 percent on Wednesday to 18,400 won, leading the wider market's 0.52 percent gain.
Shipping volumes on the crucial Asia-U.S. and Asia-Europe routes are expected to show a decline for the full year, said Hanjin, which ships to major U.S. retailers such as Wal-Mart Stores and Target.
"Carriers will have to focus on risk management, cutting costs and minimising losses," Harry Shin, senior vice president overseeing Hanjin's global accounts, said in an interview with Reuters.
"This year will be about how to survive, not how to make money."
An opportunity for freight rate increases in key routes could come around April once shipping volumes recover on seasonality, Shin said.
"There are hopes that shipping volumes in the retail sector could recover in the second half, once inventories are exhausted."
Leading container shipping firms are idling vessels in an effort to curb falling freight rates. Total global container capacity has fallen by 11 percent as of January compared to last year, according to Hanjin, the world's No. 10 container operator.
Hanjin and its alliance partners, China's COSCO Container Lines, Japan's K-Line and Taiwan's Yang Ming Line, reduced their combined capacity by 25 percent sinec late 2008 by laying up vessels. Shin said Hanjin is also working on reshuffling routes to stay profitable.
The company also might delay some future container ship deliveries depending on market conditions, he added.
Hanjin has no major deliveries due this year and will start to receive previously ordered large container ships in 2010.
Hanjin, which trails global container giants such as Danish shipping firm Maersk, Mediterranean Shipping Co and CMA CGM, plans to include more north-south trade routes and focus on profitability, Shin said.
Hanjin is seeking to grow new businesses to diversify its container shipping-focused business portfolio, such as third-party logistics including inland shipping and terminal developments. It is also slated to open a ship repair yard in China this year, Shin said.
Hanjin shares rose 3.37 percent on Wednesday to 18,400 won, leading the wider market's 0.52 percent gain.