UASC Sees Big Drop on Asian-Europe Route
Kuwait-headquartered United Arab Shipping Company (UASC) said that marked drop in Asian imports to Europe, made worse by a strong dollar, has heaped pain on container lines already struggling with massive over capacity, reports Reuters.
Jorn Hinge, president and chief executive of UASC stated that the container market, which ships retail goods from IPhones to designer clothes and food products, has been hit by a slowdown in demand for goods from Asia, especially China.
That has pushed competition into the South American market, but Brazil's recession has hurt that region too. The world's number one and number three players Maersk Line and CMA CGM have both reported a slide in third quarter net profit.
UASC has seen a 5 percent drop in volume on its important Asia to Europe route in the year to date, versus the same period last year, which was "unheard of," Hinge said.
"There is less cargo around these days," Hinge said in an interview. "All shipping lines are hunting lower costs. A lot more ships are being laid up these days. We have to go back to 2008 to see the amount of TEUs (20-foot container units) laid up that we are seeing now," Hinge said, referring to vessels taken out of service.