Major China carriers urge industry to limit capacity

SHIPPING lines need to prevent a glut of tonnage overwhelming the market and slowing global recovery, warned senior executives from China`s major ocean carriers, in the course of announcing their own positive quarterly results in Hong Kong.

Speaking to reporters, reported Bloomberg, China Cosco Holdings executive vice president Sun Jiakang said: "We call upon chief executive officers to remain level-headed to help ensure stable growth. The global economy is recovering, but it`s a process that can take years."


Said Li Shaode, chairman of China Shipping Container Line (CSCL): "The whole container market is still in a state of fluctuation. Uncertainties over demand still exist."


Said Cosco chairman Wei Jiafu: "I will use my influence to urge all members of the Asian Shipowners` Forum to be cautious when expanding capacity. You can go ahead and complete existing orders."


CSCL managing director Huang Xiaowen said transpacific rates have increased 37 per cent from June to US$2,600 per FEU, but Asia-Europe rates have changed little at $1,750 per TEU.


Rates have risen from last year as US and European retailers increased imports of Asian goods. Lines have also slowed vessels to cut fuel costs and reduce tonnage afloat.


Both Cosco and CSCL said they will not order ships in 2010. Carriers posted industry-wide losses last year as rates fell because excess tonnage was reducing demand.