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Live from Sea Asia

Lines told to get used to new normal

Lines told to get used to new normal
The container shipping industry needs to get used to a new normal of higher energy prices, lower capacity utilisation rates and a lower rate of growth going forward, according to speakers at the first session of the Sea Asia 2013 conference programme, Asian Voice in World Shipping: Liner.  

The days of rapid demand growth in the industry are gone while high energy costs are here to stay, speakers such as Maersk Line Asia-Pacific chief executive Thomas Riber Knudsen, Pacific International Lines (PIL) managing director SS Teo, APL president Kenneth Glenn and Orient Overseas Container Lines (OOCL) ceo Andy Tung, said.

This has had effects on the services being provided as lines look much more carefully now at costs now before introducing new services as well as continue the trend of slow steaming. The cumulative result of this has been to dampen the effects of excess tonnage supply.

In terms of exciting new markets, several regions stood out. PIL's Teo singled out Africa as one but warned that it needs a "strong stomach" to go in as conditions are very dynamic and situations can be very volatile.

APL's Glenn saw Latin America as a promising market that will stand to gain from the recent near sourcing trend in the Americas in particular as North American manufacturers move more of their production there.

He also pointed to the Middle East as a market that has continued to "exhibit very strong growth", although the cascading of bigger vessels from other trades has created an excess supply situation there.