Maersk Line CEO Eivind Kolding predicted in Russia Sunday that the container line is "about to break even" as ocean freight rates jump, and predicted demand will be in the upper end of its forecast range.
"We still feel there's a good balance between supply and demand, but we also know that part of it is because of inventory replenishment," Kolding said in an interview with Bloomberg News in St. Petersburg.
He said container demand will rise about 5 percent in 2010, compared with a March 4 forecast of 3 percent to 5 percent.
The Danish carrier’s container activities, which lost a record $2.09 billion last year, won't have an "acceptable return" this year because of low rates, Maersk said March 4.
"Container rates have increased quite a lot since December and they are now approaching the level where we're about to break even," said Kolding, who was speaking at the opening of Maersk's first container route between Russia and South America.
Stock rebuilding has helped push demand 10 percent to 20 percent higher so far this year, Kolding said.
Still, consumption in western Europe, which is "the fundamental driver" for the container industry, hasn't yet picked up, Kolding said.
The shipping market contracted in 2009 for the first time since containerization became globalized in the 1970s, while capacity grew as large new ships that were ordered during boom years came into service.
Eivind Kolding TPM Interview Transcript (PDF)
Contact Peter T. Leach at firstname.lastname@example.org.