Maersk exec warns of tight Trans-Pacific capacity

May 25, 2005

25 May 2005

Maersk exec warns of tight Trans-Pacific capacity

The following article is excerpted from the 25 May 2005 edition of “The Journal of Commerce”.

Port congestion, draft restrictions and the need to reduce empty containers will create a tighter market in the trans-Pacific container trades than capacity growth projections would imply, said Philip V. Connors, executive vice president and chief commercial officer of Maersk Inc. [said]….

… "Port congestion will persist as trade volume rises and will suppress effective capacity growth to more than 2 percent below nominal capacity growth," he said.

With cargo volume projected to rise 13 percent, that will create a 4 percent gap between projected increases in demand and container supply.

In addition, carriers are not able to fill ships to their full capacity because of draft restrictions at many ports.

Connors said carriers face increasing costs because of the growing gap between loaded containers and empty boxes on the world's three major East-West head-haul routes -- Asia to the U.S. and Europe, and Europe to the U.S. has added to carriers' costs because of the need to reposition empty containers. …

The imbalance is particularly severe in the trans-Pacific trade, where there are almost three times more loaded containers coming into the U.S. for every box returning to Asia, compared to a ratio of slightly more than 2 to 1 in 2000.


Topic(s): 
Canadian Economy & Politics
Information Source: 
Canadian News Channel
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