Shipping Industry Warns of Return to Strained Capacity
NEWARK, N.J., Nov. 22, 2010 /PRNewswire/ -- Although supply and demand in the container shipping industry appears in balance for next year, a growing field of analysts and industry insiders is warning that new capacity shortages are looming beyond 2011. Ongoing tightness in the availability of bank financing and a relatively lean pipeline for production of new equipment are pushing this toward certainty, according to this week's edition of The Journal of Commerce.
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Analysts say the limited access to new capital for new vessels, along with the slow resumption in the construction of new ocean shipping containers, could lead to tight capacity in 2012 for retailers and manufacturers that faced a volatile market for supply and demand earlier this year.
"You are not going to see a lot of orders over the next two or three years, not because carriers are more disciplined, but because there is no money," said Tom Kim, Goldman Sach's Hong Kong-based shipping analyst. "We do think that the lack of ship finance is going to constrain carriers from ordering new vessels. ... Those that have strong balance sheets ... will have access to capital, but the vast majority of the industry will not."
It's a question of timing — how long can the global capacity and demand of container shipping remain in balance? This week's Cover Story in The Journal of Commerce examines the current appearance of stability and its potential tipping points. Looking ahead to 2012 and beyond, JOC Senior Editor Peter T. Leach analyzes the dynamics at work on the vessel, equipment and shipper sides that might bring about a repeat capacity crisis.
To view daily news visit www.joc. com. For all media enquires, including article reprints, please contact Editorial Director Paul Page.
Since 1827, The Journal of Commerce has been the most trusted source of intelligence for international logistics executives to help them plan global supply chains and better manage day-to-day transportation of goods and commodities in the United States and internationally.
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CONTACT: Paul Page, The Journal of Commerce, Editorial Director, +1-202-355-1170, [email protected].
SOURCE The Journal of Commerce
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