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Breakeven to remain a challenge for box lines says Maersk

Breakeven to remain a challenge for box lines says Maersk

Singapore: The recent surge in container volumes may well not be sustainable, and breaking even will remain a challenge for most lines, warns Maersk Line. Hennie Van Schoor, director of business performance for Maersk Line, Asia Pacific, said the demand and supply balance for container shipping is fragile. Demand could grow by 4% this year, however if all 11% of the idle fleet is reactivated this could still see overall growth as negative, even with an additional slow steaming. However, while US import volumes have grown at 13% this year, retail sales are up just 1% meaning there was no underlying demand growth, Van Schoor told the Asia Pacific Maritime conference in Singapore. He said the message from the line's customers was, "we are not out of the woods yet". Van Schoor added the risk profile that growth would go back to being flat was "very high". The recent increases in container freight rates were also seen as very fragile, and might not continue. "Breakeven will remain a challenge for shipping lines. We will likely see continued financial distress for many shipping lines," he warned. [24/03/10]

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