Container shipping is like an arms race: CC Tung

Container shipping is like an arms race: CC Tung

Singapore: Container shipping’s rush to order ever larger ships was likened to an arms race at yesterday’s Singapore Maritime Lecture. C C Tung, chairman of Orient Overseas (International) Limited, the parent of Hong Kong boxline Orient Overseas Container Line (OOCL), said: “You cannot get out of this arm race – it’s a nature of our business.”

Tung is not the first to make this comparison – UK analysts Drewry said the same thing a couple of months ago.

The race, he said, had started with Maersk’s series of orders for EEE vessels – and the pack behind the Danish line had simply followed suit to remain competitive.

“Chief executives in shipping, especially in container shipping, all have huge egos,” Tung said.

Easy access to cash, even in a downturn, has helped fuel the spectacular rise in the ultra large container vessel orderbook, Tung said.

Tung reckoned overcapacity in the container sector is now a “permanent problem”, as liners pursue ship size upgrades and fight for market share.

“Perpetual excess capacity,” Tung said, was brought about by the industry overordering newbuilds both in good and bad times.

The Singapore Maritime Lecture takes place every year with top names from around the world invited to give their take on the industry. The very first one was given by the republic of Singapore’s founder, Lee Kuan Yew, who passed away recently.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.

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