According to Mr Kenneth Glenn president of APL, the world's sixth largest container firm, shipping firms are operating in an unsustainable economic environment with prospects unlikely to improve much in 2012 due to high fuel prices, low freight rates and slowing demand.

Mr Glenn told the Reuters Manufacturing and Transportation Summit that "The container freight market has been struggling with an overcapacity of ships and may be forced to consolidate further… Clearly, the losses that you see now and that you are likely to see in the fourth quarter are not sustainable over the long term.”

He added that "To some degree, that will result in actions that could change the playing field and could change the level of the competitive environment."

Mr Glenn, however, did not expect a repeat of the severe downturn in 2009, when a collapse in trade cost the industry an estimated USD 19.5 billion.

Although the industry is facing a relatively bleak global economy, there are bright spots in some sectors such as trade from the rest of the world into Asian and Middle East routes.

Mr Glenn said trades bound for Asia are going at a very healthy rate and they are very important in the overall profitability picture, helped by strong regional currencies and consumptions.

As for APL, Mr Glenn said that he sees high-single digit volume growth next year after taking into account the adjustment in its capacity. APL has said it was focusing on 'organic growth' and strategically implementing one of the industry's largest orderbooks with 32 container vessels, due to be delivered by 2013.

(Sourced from Exim News Service)