Chinese transport minister expects hard times in shipping market

TRANSPORT Minister Li Shenglin has said that China plans to "guide the orderly arrival" of new ships into the container and bulk sectors in the next 12 months.

Speaking at a shipping conference in Hainan, Mr Li said the transport ministry would act to control the level of shipbuilding in China, and declared the state of the shipping market was worse than in 2008, Bloomberg reported.


Chinese shipbuilders and shipping companies have been stung by declining container freight and bulk rates. "Chinese shipbuilders aggressively entered the market for smaller container vessels and bulkers, flooding the market with vessels that are often financed by Chinese state banks. With the sector now heavily over-ordered and buyers more interested in the large ships built by Korean yards, the Chinese are suffering," Mr Li said.


Cosco and China Shipping Container Lines have also posted financial losses recently. "These state-owned companies have moved aggressively to grow market share, but they still lack the economies of scale of the market leaders and are suffering particularly badly in the present environment of low rates," the report said.


Nonetheless, the container shipping segment is expected to achieve four or five per cent growth this year, compared to zero growth for air freight.