P&O Nedlloyd sees surge in US, Europe exports and altered regional sourcing
The pattern of intra-Asia trade is changing rapidly due to the Asian financial crisis, a shipping executive says.
Exports from Japan to Malaysia, Thailand and Indonesia had become more expensive due to the devaluation of currencies in those countries, Anglo-Dutch P&O Nedlloyd Asia's director Remi Speld said.
'We see a more changing pattern in the trade as the pattern of sourcing goods has changed,' he said, adding that some sourcing was now between Malaysia, Thailand and Indonesia.
P&O Nedlloyd was well positioned to cater for the changes with its network, he added.
Average volumes of intra-Asia trade have fallen, with people being urged to buy local goods instead of imports, especially luxury goods.
Asian exports were rising and P&O Nedlloyd's vessels had full bookings to Europe, Mr Speld said, adding that the trend was expected to continue over the next few months.
He rejected claims of an economic slowdown in the mainland, saying the country still offered the second-cheapest labour in Asia, after Indonesia.
He said P&O Nedlloyd's strongest Asian market was Japan, followed by Hong Kong and southern China, central and northern China, and the rest of Southeast Asia.
He said Asian operations expected 10 per cent growth this year despite the financial turmoil.
Although imports were down, exports to Europe and the United States were booming.
Mr Speld said since P&O and Nedlloyd merged last year, the about 100 Asian offices had been merged to form 70 offices, and staff cut from 2,650 to 2,050.
Mr Speld said P&O Nedlloyd was consolidating and streamlining the organisation.
He said the firm, which served 23 main trades in and out of Asia, was in a better position to meet the challenges involved in repositioning of containers.
The carrier was not facing a critical imbalance, but rather had opportunities to meet the surge in export demand.
Leasing companies are capitalising on the situation because of the shortage of containers for exports.
P&O Nedlloyd also eased the impact of the shortage of containers for exports by taking part in delivery of a 40,000-container order since the second half of last year.
All the containers will be delivered in time for the peak season in the middle of this year.
The carrier also has placed orders for another 28,000 containers this year.
P&O Nedlloyd, which has 14 vessels on order, this month will be taking delivery of the first in a series of four 6,600-teu (20 ft equivalent units) vessels, being built in Japan.
The first vessel, to be named P&O Nedlloyd Southampton, will be phased into the Grand Alliance service of which the carrier is a member.
The other three giant newbuildings will be named P&O Nedlloyd Kobe, P&O Nedlloyd Kowloon and P&O Nedlloyd Rotterdam.
Separately, the line has formalised the acquisition of Blue Star Line's container shipping business and its subsidiaries for about GBP60 million (about HK$777 million).
The line says the deal will result in substantial cost savings and will further reinforce P&O Nedlloyd's already strong position in the north-south refrigerated-cargo trades.