As a result of an oversupply of vessels in the industry, the global shipping market is unlikely to see a recovery during the next two years, according to the chairman of China Ocean Shipping Group (COSCO), Ma Zehua.
Vessels have swamped the market since the financial crisis of 2008 and now the sector is experiencing overcapacity, Ma Zehua told reporters.
The chairman of COSCO said that the firm now plans to focus on cost control, as well as expanding to South America and the Middle East, as it looks to secure long-term customers.
Ma Zehua said: “I don't think the market will recover within the next two years. There are a lot of new building orders, which means the chances of the supply-demand imbalance improving soon are small.”
He added: “Everyone will compete on costs, because improving income is very difficult, if you want to increase the freight rate it's tough, it's not possible, the only way is to control costs.”
Ma Zehua said the company would also announce partnerships with other large Chinese shipping firms in an effort to consolidate China’s shipping industry; an initiative that has been set out by the Chinese government, according to Reuters.
COSCO Group controls more than 800 vessels and manages six listed firms, including China COSCO Holdings and COSCO Corp.