MSC Says Carriers Must Deploy Larger Ships

Mediterranean Shipping Co. said carries must deploy the biggest vessels possible on the Asia-Europe trade to minimize losses, according to Bloomberg.

The world’s second largest carrier also expect a slowdown in world trade growth to spur more alliances between rival carriers like its recently unveiled partnership with CMA CGM. Diego Aponte, MSC vice-president, said he expects the Asia-Europe route to remain unprofitable until 2013 because of weak demand and a glut of capacity.

“Economies of scale are essential. Freight rates will be under pressure for many years,” Aponte said. “Volume growth is there, but it will never be explosive like it used to be in 2007.”

Carriers that lack global reach won’t survive in the future, he said.

MSC’s partnership with CMA CGM is a bid to keep pace with Maresk Line after the world’s largest carrier placed orders for 20 ship with 18,000 20-foot equivalent unit capacity, valued at $3.8 billion, and launched a seven-days-a-week service between four Asian and three north European ports.

-- Contact Bruce Barnard at brucebarnard47@hotmail.com.