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Pessimistic outlook on container market till 2010 for Maersk's Nils Andersen

Pessimistic outlook on container market till 2010 for Maersk's Nils Andersen

Singapore: Nils Smedegaard Andersen, ceo of Maersk, the world's largest container shipping line, has told Channel News Asia that he does not expect a quick recovery in freight rates. He also said the container shipping business will likely remain depressed until end-2010.

Andersen says the company is taking all necessary measures to weather slowing demand and overcapacity. He also said Maersk could join its rivals to lay up more ships if the economic situation continues to hit global trade. Last month, the firm announced that it was laying up eight mega vessels due to a drop in demand.

"The problem at the moment is that the market has been severely oversupplied with new ships and there will be a continued flow of new ships over the next couple of years, so during that time, the market will be challenging,"he said.

Maersk has unveiled several measures to cut costs. Among them is a plan to streamline its management processes and to reduce its reliance on banks.

Andersen said, "We've reduced investment levels down to what we can find inside our own cash flows over a two-year period, and that means we don't have to go out and seek additional financing."

Maersk expects net profits for 2008 to hit $4 billion to $4.3bn, while 2009 projections indicate a net profit of$3bn.  [15/01/09]