MAERSK

Maersk Line, the world's largest container shipping firm, expects container shipping to grow by 7 to 8 percent globally this year, with trade within Asia outperforming that, in spite of soaring fuel costs and a slowing world economy. "Asia is the factory of the world, so Asia doesn't grow anymore than the U.S. and Europe is willing to buy," Maersk Line's Asia Pacific Chief Executive Jesper Praestensgaard told Reuters in an interview on Wednesday."But intra-Asia trade is growing relatively more than between the regions, so Asia is probably more shielded from a downturn in the U.S. and Europe," he said, adding the firm will introduce a new China-Singapore service from next week to tap growing demand.Maersk Line, part of Danish shipping and oil group A.P. Moller-Maersk, now operates over 500 container vessels and 1.9 million containers. Since June it has ordered 34 new ships for delivery by 2012, amid concerns of an impending oversupply in shipping capacity worldwide."Shipping is cyclical, everyone knows that. So when we make investments in shipping, we invest in ships with life-spans of 25-30 years, and you have to measure success over that life-span," said Praestensgaard.Soaring bunker fuel prices, now at over $750 per tonne up from about $500 in January, now represents over 50 percent of the firm's operating costs, and has had a significant impact on margins, he said.Maersk's biggest container ships, at full capacity, can consume an estimated 46,200 litres of fuel for every 100 kilometres traveled.Maersk Line partially offsets its fuel costs by imposing a bunker adjustment charge on customers, fuel hedging, and the practice of "slow steaming", where shippers operate vessels at slower speeds to cut fuel consumption and make up for it by increasing the number of ships on a route."There is no doubt that the current oil prices is hindering global trade, both in terms of reducing consumption and increasing transportation costs in general," Praestensgaard said.MERGERS GOOD

Exporters need more shipping containers

At ports, a shortage of cargo containers seems about as unlikely as cardboard boxes suddenly becoming obsolete. The weak dollar has made U.S. goods cheaper overseas and has created a new wrinkle for the shipping industry: Containers are increasingly hard to come by. “The import volume has slowed down, so fewer boxes are coming in, and exporters are seeing more demand,” said Kevin Mack, a vice president at Newark, N.J.-based Columbia Containers. “I’ve been in the business for 25 years, and this is the first time I can remember this happening.”While most containers come into ports on the East Coast, the Midwest can’t find enough of them to handle the rising exports of grains, soybeans and corn bound for overseas markets.“It’s all logistics,” said Sherif Gendi, who arranges U.S. grain exports for the trading company Marubeni America in New York City. “The containers,” he said, “aren’t getting to where they’re needed.”That’s because moving empty containers around is an expense no one wants to absorb.

Lines to increase inland fuel surcharges

Container lines in the Transpacific Stabilisation Agreement (TSA) are set to increase inland fuel surcharges (IFS) to better reflect the prices they pay for inland fuel in their intermodal operations, TSA announced. TSA, whose members include CMA-CGM, Orient Overseas Container Line, Hapag-Lloyd and Cosco Container Lines amongst others, first introduced IFS in mid-2005, a result of rising surcharges from railroads and motor carriers. TSA executive administrator Brian Conrad noted that ocean carriers are seeing the base rates of rail and trucking operations increase, and those rates increased yet again through fuel surcharges.He further noted that costs are frequently compounded when carriers provide intermodal services using third-party transportation companies, and that container lines will return to a floating surcharge that is adjusted on a monthly basis to reflect highway diesel price fluctuations. TSA lines are seeing slower year-to-date cargo volumes relative to 2007. Factors responsible include a slowdown in cargo exports from North China, a result of factories closing down around Beijing due to the Olympic Games. Dense fog conditions affecting vessels at Qingdao was also cited. TSA members noted that there has been a shift in cargo to the US East Coast, in part due to uncertainly over West Coast longshore labour negotiations following the expiry of their six-year labour agreement on July 1.