The container transport industry worldwide has been struck hard with the recession. The European shipping industry is no exception. Some of the largest shipping companies are based in European nations such as Denmark, Switzerland, France and Germany. The Danish Maersk has the largest fleet, owning 15% of the world’s market share. It has been predicted by analysts its fleets will be reduced by several millions by the end of this year.
Twelve percent of the industry’s fleets are left idling. The industry’s attempt to reduce their excessive numbers of fleets is evident with the ships left along the shorelines of Singapore. Now referred to as ghost ships, hundreds of crewless vessels from Western nations are left anchored together in the southern Malaysian area.
The city of London is said to be the bastion of container transport industry. It is also the place where the effects of reduced trade and plunging profits are felt the most. Chartering costs have plummeted to encourage business but with very little result. Last year, a container capable of carrying 80,000 tons of freight would have cost £31,000 or $50,000 for each day that it was used. With the recession, the cost dropped to a mere £3,400 or $5,500. A year ago, a 40 foot container holding goods from China bound for the UK cost £850, not including other charges. This year, the price dropped to £180.
With the cost of running ships per day exceeding their daily profits, European container companies are left with hard decisions. The industry is keeping a close eye with the demand for the Christmas season, hoping that there would be a flurry of activity and demand for their services. For now, looking forward to a brighter new year might be a long way off.