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SINGAPORE: The world's largest container shipping line, Maersk, has said it does not expect a quick recovery in freight rates. It also said the container shipping business will likely remain depressed until end-2010.
Maersk CEO Nils Smedegaard Andersen said the company is taking all necessary measures to weather slowing demand and overcapacity.
The container shipping industry has been in rough waters for several months due to the global economic downturn.
Maersk said it could join its rivals to lay up more ships if the economic situation continues to hit global trade. Last month, the firm announced that it was laying up eight mega vessels due to a drop in demand.
"The problem at the moment is that the market has been severely oversupplied with new ships and there will be a continued flow of new ships over the next couple of years, so during that time, the market will be challenging," said Mr Andersen.
Maersk has unveiled several measures to cut costs. Among them is a plan to streamline its management processes and to reduce its reliance on banks.
Mr Andersen said: "We've reduced investment levels down to what we can find inside our own cash flows over a two-year period, and that means we don't have to go out and seek additional financing."
Maersk expects net profits for 2008 to hit US$4 billion to US$4.3 billion, while 2009 projections indicate a net profit of US$3 billion.
- CNA/so
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