Box demand will outpace supply: APL chief

Box demand will outpace supply: APL chief

Comments that freight rates will fall as early as next year are inaccurate and analysts have consistently underestimated the growth in demand for shipping services, the head of Neptune Orient Line Ltd.'s APL unit said, the Straits Times reports.

Ron Widdows, who heads NOL's container shipping arm APL, said his 30-year career in the shipping industry has taught him to be skeptical of forecasts.

"If you were to cycle back a year ago, people were projecting excess capacity in 2004. Not only is there no excess capacity, but also the world's supply of existing container ships that exists today is fully employed," the paper quoted him as saying.

Instead, he reckons demand for container shipping will continue outpacing supply this year and next year.

"At some point in time, there will be a softening of demand, but it's a little further out than some folks have predicted," he said.

Citigroup said in a recent report that the shipping industry is now ordering a number of ships equivalent to 42 percent of current capacity, which was usually a precursor to downturns.