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The
chairman of the Malaysian Shipowners
Association Datuk Hj Mohd Ali Yasin
has urged the shipping industry to
take cognizant of the downturn the
industry which is in the midst of
and address in a forthright manner
measures to contain the impact of
the weaken demand and depressed
freight markets.
“Removing
excess capacity has limited impact
but is nevertheless an immediate way
out of this volatile market
condition,” he said.
He
urged local shipowners to exercise
greater prudence over operational
issues with a view to running a
tight ship in these uncertain times.
“We
are now right in the middle of
a global slow down that has only
been made worst by the horrific
attack by terrorists on the US on
September 11 2001. The unfortunate
incident has precipitated a chain of
events that have impacted on
shipping globally in an unexpected
and in an unprecedented manner,’
noted Ali, who is the managing
director of the Malaysia
International Shipping Corporation
Bhd.
He
said shipping, which was already
facing depressed market condition
and rising costs even before the
unfortunate attack, stands now
burdened by sharp increase in
operation costs as well as further
diminished market prospects.
Immediately
following the attack, shipowners
worldwide faced dearer costs as
P&I clubs came out with
increased liability cover.
“The
sharp increase in the hull war risks
cover was not a true reflection of
the risk faced since there was
blanket application of the new
rates,” Ali said.
There
was also a great deal of uncertainty
in the market and this has
contributed to weakening of the
demand. Charter rates have plunged,
freight rates have slid
unexpectedly.
The
market is now awash with surplus
capacity thus creating an extremely
vulnerably situation for shipowners
in the immediate months ahead.
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