No festive cheer for shipping industry, Maersk boss David Skov says
Slow global demand and low freight rates mean little festive cheer for the industry during what is traditionally a strong period for world trade
The world's biggest shipping group, Maersk Line, says the Christmas season is unlikely to boost sluggish shipping business this year because of slow global demand and an "unsustainably low freight rate".
David Skov, the Danish shipping company's head of South China operations, made the comments in Hong Kong yesterday, echoing the concerns of local exporters who said they had seen big US retail chain Walmart and sportswear brand Nike cut orders for the festive season.
"We haven't seen a Christmas or Golden Week rush this year, traditionally this season should be very strong for trade, but it's going to be different this year," Skov said after the maiden port call of its first Triple E container ship - the world's largest - in Hong Kong.
As cargo growth is likely to stay flat over the next two months, Maersk - which alone handles a fifth of cargo on the lucrative Asia-Europe route - planned to make another attempt next month to raise the freight rate, currently around US$765 for each 20-foot container, by US$950 as it had fallen below the widely recognised break-even point of around US$1,000 to US$1,100.
The current [freight] rate is simply not sustainable, it has to come up
"The current rate is simply not sustainable, it has to come up," Skov said.