CEO of German box shipping group Hamburg Süd said he anticipates recovery in the container shipping industry to occur ''sooner than later''.
CEO of German box shipping group Hamburg Süd said he anticipates recovery in the container shipping industry to occur ''sooner than later''. "Experts predict that sea transport capacities and cargo will only reach equilibrium in 2014 or 2015," Ottmar Gast said in an interview with Hamburger Abendblatt.
"We anticipate that this will happen two or three years earlier. The development of world trade is currently being assessed too pessimistically."
Gast, who replaced Klaus Meves as CEO in early 2009, reasoned that fleet overcapacity in the industry has been "eliminated" via the cancellation of newbuild orders in China and also through the postponement of vessel deliveries.
He added, however, that Hamburg Süd is set to take delivery of all 12 newbuildings, 10 of which are 7,100 teu boxships - the largest used for the trades to South America, in its orderbook by 2012.
"It is impossible to cancel newbuilding orders at Korean shipyards, unless you are in breach of contract. That is not our style. We also need the vessels," Gast said.
He added that Hamburg Süd recorded "slight" losses in 2009.
The company's revenues dropped from ?4.45 billion ($6.4 billion) to ?3.2 billion ($4.6 billion) in 2009 while tonnage lifted was 2.3 million TEUs in 2009, 14% less than 2.7 million teu a year ago.
"But our losses are lower than for all other shipping companies that we know," Gast said.
He added that the company is "proud" that it does not need to get aid from either its parent company Oetker Group, or from other sources.
"Our strategy was to stop the decline in prices for sea transport, thus the freight rates," Gast said.
"We were able to work undisturbed, because the management did not have to resolve ongoing financial problems."
He added that the company owned many of the vessels, therefore were not exposed to payments of high charter rates.
In addition, it is not affected by interest rates or repayments of debts as it has a policy of paying for the newbuild orders using cash from their reserves.
Hamburg Sud currently operates a fleet of 106 box vessels, 32 bulk carriers and eight product tankers.