Englewood Cliffs, New Jersey-
By ANUK Staff
3.4.13
Maersk Line’s Chief Executive Officer for North Asia Tim Smith said that over-capacity in the global container ship market will continue to provide a drain on profit growth in 2013.
Smith warned that capacity issues in the global container market would continue to put downward pressure on industry participants this year, according to CNBC.
"This year there should be 10 to 11 percent more capacity coming in from the ship yards. As we expect 4 to 5 percent demand growth, we still need to bridge that gap. We need to carefully monitor supply and demand and take ships out if they are not needed," he commented.
Despite market conditions, the world’s largest container shipper reported last month a profit of $461 million for 2012 on cost cuts and improving demand. Parent company Maersk Group, reported a net profit of $4 billion for the full year, over the $3.7 billion it forecast in November.
Smith said he was "positively surprised" by the firm's growth despite difficult market conditions relating to Europe's debt crisis, which hit shipping routes between Asia and Europe.
"Last year was about getting supply and demand matched up. We saw a big reduction in demand so we focused on taking some ships out. On our Asia-Europe route we took 21 percent of capacity out," he said.
Smith expects modest growth in the global container industry for the remainder of the year.
"We see a similar year to 2012 with a lot of uncertainty and not a great deal of demand improvement. Last year global containerized trade grew by 2-3 percent this year it'll be more like 4-5 percent, but still with a lot of variability," he said.
"Europe looks flat and North America, a bit better. The best chances of growth are in China, Asia and the emerging markets, particularly India, the Middle East and South America are the stronger areas," he said.
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Maersk Line
Maersk Line, the global containerized division of the A.P. Moller – Maersk Group, is dedicated to delivering the highest…
