Pressure on Container Market Akin to 2008 Recession: UASC
By Aiswarya Lakshmi
Friday, November 27, 2015
A marked drop in Asian imports to Europe, made worse by a strong dollar, has exacerbated the pressure on shipping lines already struggling with massive over capacity, Arabian Supply Chain quotes United Arab Shipping Company (UASC) as saying.
Jorn Hinge, president and chief executive of UASC, speaking to Reuters, said that the container market has been hit by a slowdown in demand for goods from Asia, especially China. That has pushed competition into the South American market.
Shipping giants like Maersk Line and CMA CGM have both reported a slide in third quarter net profit. UASC hasn’t escaped unscathed, the Middle East’s leading shipping line has seen a 5 percent drop in volume on its flagship Asia to Europe route in the year to date, versus the same period last year, which was "unheard of," Hinge said.
All shipping lines are hunting lower costs. A lot more ships are being laid up these days, he said. "We have to go back to 2008 to see the amount of TEUs (20-foot container units) laid up that we are seeing now," Jorn added