China Merchants Group sees no end yet to slack in dry bulk cargo
March 28, 2013 Category Logistics, Ports & sea transport
The business woes of dry bulk cargo shippers are unlikely to end this year because of excess capacity, according to the Chairman of the China Merchants Group, Fu Yuning. “The dry bulk cargo shipping sector will still be under pressure,” Fu said. “I don’t expect the problem of excess capacity to improve this year.” Excess capacity has put pressure on freight rates, hurting shipping companies’ profits. He said China Merchants, a state-owned conglomerate which has operations in shipping, ports and property, had no plans to expand its shipping fleet any further this year. But its capacity would continue to increase, because some ships ordered earlier had still to actually join the company’s fleet, he said. Fu said he expected volumes on Pacific routes to improve this year as the European economy had stabilized. “Once global trade picks up slightly, shipping companies should take the chance to rearrange their capacity,” he said, but he added that fuel costs would stay high because of high oil prices. He said he expected China’s exports to increase from last year but achieving 8% growth in foreign trade would not be easy, as uncertainty over the European debt crisis remained.
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