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Asian container exports to the West will take up to five years to recover after last year's market plunge, but a boom in traffic between China and Southeast Asia will help offset losses, the head of Pacific International Lines (PIL) said on Friday. The box shipping industry, led by larger rivals AP Moller-Maersk and China Cosco Holdings, continues to recover from depressed levels in 2009 when the industry slashed capacity in response to the global downturn.
Analysts estimate the industry, which is closely linked to global economic growth, lost as much as US$15 billion last year as container traffic tumbled by nearly 10 per cent.
SS Teo, managing director of privately-held PIL, based in Singapore, told Reuters the container market's recovery would be fuelled by China's red-hot demand for semi-finished products and raw materials from other Asian countries.
'The Asia-Europe and Asia-US markets will take two to five years to return to pre-crisis levels,' said Mr Teo, who is also the president of the Singapore Shipping Association and a member of parliament.
'But I'm not that pessimistic because the shortfall will be made up by the intra-Asia volume.'
Intra-Asia growth
Container freight rates are expected to grow by around 9 per cent to US$920 per twenty-foot equivalent unit (TEU) in 2011 from last year, shipping analysts with DnB NOR Markets, part of Norway's biggest bank, said this month.
That compares to an increase of around 3 per cent for freight rates between Asia and the West.
'I don't think we can say the Asian market will decouple from the West, but we will continue to see the Asian economy become more resilient,' he said. PIL, ranked in the top 20 of the world's container ship companies, plans to add six new vessels by the end of 2012 to its fleet of 133 ships.
The family-run firm, which says its annual turnover is around $3.8 billion (US$2.86 billion), is not interested in putting itself on the market or going public.
'No one has approached us seriously. We are happy staying private,' said Mr Teo, who declined comment on the company's profit outlook for this year and next.
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