Maersk Expects Slower Shipping Growth
A senior executive at Maersk Line said Monday the carrier expects the strong shipping growth early this year to slow down in the second half of the year because volume has outpaced gains in retail sales. ?The current supply and demand balance remains fragile,? Morten H. Engelstoft, chief operating officer at Maersk Line, told the annual Containerisation International Global Liner Shipping Conference in London.
Engelstoft said the reported increase of just more than 1 percent in U.S. retail sales in February far outpaced growth in U.S. containerized import volume. ?So apparently restocking is the driver of the increase in demand,? he said.
Because of that, ?We do see continued demand growing more slowly than what we are seeing in the first half of this year,? Engelstoft said.
That would be poor news for ocean carriers depending on strong demand expansion in the coming peak season to help push through continued rate increases. Engelstoft said despite rapid growth from last year"s historic lows, prices remain below what carriers need to maintain profitability.
?Rate increases and rate levels remain at a fragile level,? he said. ?We see rate levels being at about a break-even level. But no one is in this business to operate at something less than profitable level.?
Maersk, the world"s largest containership operator, lost $2.088 billion last year, partly the result of what the carrier said was a 28 percent decline in average rates in 2009 from the year before.
Ben Hackett of Hackett Associates, author of the Port Tracker report released by the National Retail Federation said he was more upbeat, forecasting 11 to 12 percent growth this year for trans-Pacific imports.
?The importers are being very cautious,? he said, but ?stocks are still thin and consumers are coming back, as we see in the March numbers on retail sales that were just released. I think the second half of 2010 will be relatively strong.?