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10 February 2012 12:56PM

Sharp upturn in use of shipping containers

20 Aug 10 ,  Financial Time
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The use of shipping containers, a barometer of the global economy, has risen sharply this year, surpassing even the record levels of 2008.

Two of the most important companies in container trade -- Denmark's AP Møller-Maersk and Dubai's DP World -- on Wednesday reported further evidence of the recovery in the trade in the boxes that carry the world's manufactured goods.


The upturn, boosted by traffic of goods to and from emerging economies, has been so strong that analysts say that it has caught many by surprise.


Maersk, owner of Maersk Line, much the world's largest container carrier, said volumes on long-distance routes served by its ships had been up 13 per cent in the first half this year compared with last. Trans-pacific services between Asia and North America saw an 11 per cent increase, while services to and from Latin America saw an 18 per cent improvement.


DP World container movements at its ports were up 7 per cent in the first half over the same period last year. Its Australia and Americas division, which includes Latin America, saw volumes up 31 per cent on last year.


The two companies' figures come in the same week that Singapore's Neptune Orient Lines announced its volumes in the year to July 23 were 35 per cent up on the same period of 2009.


The recovery in trade has been so unexpectedly rapid that Maersk and several other lines have already had to apologise to customers for running out of containers after ordering too few to cope.


The increased volumes have pushed up rates per container shipped, boosting the profitability of lines. Maersk said rates per 40-foot container were 30 per cent higher for the first half this year than last year, while Neptune Orient Lines has seen a 15 per cent improvement in the year to July 23.


Maersk predicted net profits this year of more than $4bn, close to the record $4.69bn (€3.6bn) achieved in 2004.


However, Nils Andersen, chief executive, said there was still room for further improvement in rates per container shipped, following last year's slump.


"The conditions are good -- they're not extraordinarily good. The conditions last year were extraordinarily bad," he said.


Both Maersk and DP World warned that they still faced risks from a downturn in the global economy, while they had yet to see signs of one.


"If conditions should deteriorate in the global economy, the container shipping companies will feel the effect," Mr Andersen said.


This year's recovery comes after the first year-on-year fall in trade volumes in 2009, when volumes fell more than 10 per cent. The fall sent rates per container shipped plummeting and left many container shipping lines needing bail-outs from investors or governments.

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