Challenges facing boxlines debated at Sea Asia

Challenges facing boxlines debated at Sea Asia

Singapore: The global container shipping market is still not optimistic for the foreseeable future, and cost control has become one of the top priorities, executives told delegates at the Sea Asia conference.

“China’s economy obviously is slowing down, it is changing from manufacturing-oriented to service-oriented and the European economy is also sluggish, which will keep softening the shipping market in the region,” Masamichi Morooka, chairman of the International Chamber of Shipping, said.

Kenneth Glenn, president of APL, said the growth of top containerlines has been challenged and the rate continues to decline by about 2% annually over the past 10 years, while costs remain high.

Glenn said APL has seen a decline in fuel costs but land costs including terminal costs and trucking costs continue to increase.

To deal with increasing costs, a number of top lines have established various alliances in the past few years, which has raised lots of opposition in the market about monopoly concerns.

Lars Mikael Jensen, ceo, Asia Pacific region, Maersk Line, argued that the alliances of top lines have been established not only for cost reasons, but also for demand and efficiencies, adding that the top lines on the east-west trade routes almost have the same coverage, and the alliances are set up not on a commercial basis but an operational basis.

According to Glenn, the adoption of LNG-powered ships in container trades will become a future trend and it is already happening in some domestic markets. However, it will only become viable if there are enough infrastructures in place.

“My largest concern for the industry in the next five years is any disruption in east-west trades,” Glenn said.

Jason Jiang

Jason worked for a number of logistics firms following his English degree, then switched this hands-on experience to writing and has since become one the most prolific writers on the diverse China logistics industry writing for a host of titles including Supply Chain Asia, Cargo Facts and Air Cargo Week. Jason’s access to the biggest shippers with business in China has proved an invaluable source of exclusives.

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