News Content
Long Beach port chief executive sees no quick fix, but only mergers ahead
CHEAP credit and low fuel prices are propping up weak players and delaying the mergers and alliances needed to resolve the current crisis the container shipping, says Port of Long Beach CEO Jon Slangerup.
"There are going to be some lingering weak players and it will take some time to sort out," Mr Slangerup, after meeting shipping clients in Copenhagen, Hamburg and Geneva. "It will be a year or two. A year for some, two for others."
Slowing demand in China and Europe combined with a glut of containerships has culminated in Drewry Maritime Equity Research last month forecasting the industry will collectively lose US$6 billion this year, reported Bloomberg News.
Over at Long Beach, cargo volumes dived 22 per cent in April after CMA CGM following its acquisition of Singapore's NOL shifted business to the Port of Los Angeles.
"We are in the middle of all this musical chairs so volumes are shifting dynamically as we speak," said Mr Slangerup. The port derives 90 per cent of its business from trade with Asia.
He now predicts volumes should "normalise" in the third quarter. Cargo increased 6.1 per cent in the first quarter, following a 5.4 per cent gain in 2015.
As interest rates and fuel prices rise, mergers and alliances designed to cut costs by sharing ships should proliferate, said Mr Slangerup.
He says that there could be further consolidation in the South Korean shipping industry as Hanjin Shipping and Hyundai Merchant Marine, which is working with creditors to restructure its debt, are both struggling financially.
"The South Koreans are in trouble," Mr Slangerup said. "They are competitors but it would not surprise me if they were forced to join together as one."
"There are going to be some lingering weak players and it will take some time to sort out," Mr Slangerup, after meeting shipping clients in Copenhagen, Hamburg and Geneva. "It will be a year or two. A year for some, two for others."
Slowing demand in China and Europe combined with a glut of containerships has culminated in Drewry Maritime Equity Research last month forecasting the industry will collectively lose US$6 billion this year, reported Bloomberg News.
Over at Long Beach, cargo volumes dived 22 per cent in April after CMA CGM following its acquisition of Singapore's NOL shifted business to the Port of Los Angeles.
"We are in the middle of all this musical chairs so volumes are shifting dynamically as we speak," said Mr Slangerup. The port derives 90 per cent of its business from trade with Asia.
He now predicts volumes should "normalise" in the third quarter. Cargo increased 6.1 per cent in the first quarter, following a 5.4 per cent gain in 2015.
As interest rates and fuel prices rise, mergers and alliances designed to cut costs by sharing ships should proliferate, said Mr Slangerup.
He says that there could be further consolidation in the South Korean shipping industry as Hanjin Shipping and Hyundai Merchant Marine, which is working with creditors to restructure its debt, are both struggling financially.
"The South Koreans are in trouble," Mr Slangerup said. "They are competitors but it would not surprise me if they were forced to join together as one."
Latest News
- For the first time, tianjin Port realized the whole process of dock operati...
- From January to August, piracy incidents in Asia increased by 38%!The situa...
- Quasi-conference TSA closes as role redundant in mega merger world
- Singapore says TPP, born again as CPTPP, is now headed for adoption
- Antwerp posts 5th record year with boxes up 4.3pc to 10 million TEU
- Savannah lifts record 4 million TEU in '17 as it deepens port
