The Israeli shipping line Zim has come to an agreement with a shipyard to defer delivery of 4 containerships currently under construction for 4 to 5 years. It will take delivery of the four 10,000 TEU vessels, originally scheduled to be delivered next year, in 2014 or 2015, depending on market conditions.

The agreement follows Zim's recent deal with another shipyard that will see the delivery of nine 12,600 TEU vessels put back until 2014 and 2015. The two agreements mean that the line has now deferred around USD 2 billion of investment.

Mr Rafi Danieli CEO of Zim said that "This understanding reflects the shipyards' clear expression of confidence in Zim's recovery plan, and in the company's long term commercial success. As with the rest of the shipping industry, Zim has recently been faced with very challenging market conditions in the depths of a major downturn. Industry experts predict that by 2014-2015, we'll be well past the crisis and the market will have recovered."

He added that "2009 will mark a uniquely difficult period, in terms of the severity of this global shipping crisis. We have worked to ensure we're fully prepared for continuing weakness in the market throughout 2010, and our recovery plan includes adequate measures to cope with this situation. This conservative approach means we will be in a strong position when the industry cycle starts to improve. We believe we will see a gradual recovery in 2011 at the latest, getting us back to profitability and positive returns for our shareholders thereafter."

Zim said that 2011 would see the first signs of growth in the global container shipping market, and added that industry forecasts anticipate significantly improved trade terms in 2012-2013, due to increased demand in world markets and the delay in delivery of new vessels. It forecasted delivering an operating profit of around USD 100 million in 2011, USD 350 million in 2012 and USD 500 million in 2013.

It may be note that Zim's parent company, Israel Corporation, is seeking approval for a USD 450 million injection to support the line's recovery plan. A shareholders meeting is due to be held this month.

(Sourced from www.ifw-net)