Global shipping companies streamline management

Amid worries of a long-term global depression, international shipping companies are heavily streamlining their operations.

According to the shipping industry on November 5, shipping companies moved to cut vessel capacities and to hold on to investments as the future of the global economy is hazy at best, in part due to accelerating economic slow-downs and continued US bombing in Afghanistan.

The New World Alliance, a member of American President Lines (APL), Mitsui O.S.K. Line (MOL) and Hyundai Merchant Marine (HMM) decreased their trades in the US and Asia to 8 trades from 9. Business from the dropped trade route will be distributed among the remaining 8.

Hanjin, having pushed for a strategic alliance with K-Line and Senator, is also expected to establish a basic agreement within the month and to reshuffle its fleet.

Grand Alliance with P&O Nedlloyd, NYK, and Hapag-Lloyd also agreed to reduce their operations in Trans-Atlantic trades by 10% to 36 operations from their current 40.

CP ships, marked as the most profitable company among liners last year, also postponed its plans to acquire new vessels and containers for the time being as its operating profits dropped by 20% to 34 million dollars in the third quarter of this year. CP planned to buy 100 million dollars worth of vessels last year and has already purchased a few used vessels for around 30 million dollars.

This accounted for vessel over-supply in Trans-Atlantic trades and gloomy expectations for the economy this Christmas season.

An officer at HMM said, "As total vessels in the trade are over-supplied and domestic investment was so poor, global shipping companies are heavily streamlining."