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Saturday, July 21, 2018

Maersk CEO: Negative Rates Hurting Shipping

Maritime Activity Reports, Inc.

May 10, 2016

Nils S. Andersen. Photo: Maersk Group

Nils S. Andersen. Photo: Maersk Group

Negative interest rates are hurting  shipping industry by delaying the consolidation wave so badly needed, Bloomberg reports quoting Nils Smedegaard Andersen, chief executive officer of AP Moeller-Maersk.

He said that the monetary policy environment "means consolidation will be much slower because it's easy for banks to keep weak shipping companies above water".
It’s the latest example of how negative interest rates are distorting markets and potentially even slowing growth. 
The policy has so far had limited success in reviving inflation while money managers in countries with negative rates are warning of the risk of asset price bubbles. 
With the unintended consequences potentially including a slower global shipping recovery, questions as to the policy’s efficacy are bound to persist.
The shipping industry doesn’t have the buffers to deal with more hurdles. Container lines are “staring at a terrible 2016,” with a slowdown in global trade volumes, low freight rates and overcapacity, Drewry Maritime Equity Research said in a report last month.
It estimates the industry will lose $6 billion this year.
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