Due to the weaker demand and overcapacity that are currently taking place in the industry, Jon Slangerup, CEO of the Port of Long Beach has said that, despite ongoing consolidation, shipping lines can expect another 1-2 more years of pain, according to Bloomberg.
Slangerup said: “There are going to be some lingering weak players and it will take some time to sort out. It will be a year or two. A year for some, two for others.
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“Even though we had a very good first quarter and we had a very good last year, our second quarter will be very weak. We are in the middle of all this musical chairs so volumes are shifting dynamically as we speak.”
The current state of shipping has prompted many carriers to consolidate resources, the most recent example being Hapag-Lloyd’s ‘THE Alliance’.
If United Arab Shipping Company moves ahead with joining the alliance, its total capacity will surpass four million TEU.
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It was recently reported by PTI that the alliance is currently planning an extensive and trouble-free integration.
Mr Slangerup concluded by saying that he believes that the 2M vessel-sharing agreement between Maersk and MSC represents the ‘gold standard’ in the industry.