APL president: Rates must come up for carriers to reinvest
The global head of container shipping business APL told a conference in Southern China Wednesday that freight rates must increase across all trades in order for the liner shipping sector to see a real recovery.
APL President Eng Aik Meng said in a keynote address at the third annual Transpacific Maritime Asia conference in Shenzhen that it was premature to talk of a significant recovery, even as some trades shows signs of stabilizing in terms of volume.
'Rates in some trades remained at historic low levels that do not entirely cover the costs of running ships,' Eng said.
Echoing sentiments from Ron Widdows, chief executive officer of APL parent NOL and Eng predecessor as head of APL, he said carriers should use the current downturn to better engage with their customers, 'so we can better understand one another’s challenges and also to develop strategies to capture business opportunities that are mutually beneficial.”
APL has, like other liner carriers, been hit hard by a steep decline in demand and freight rates. While the carrier's numbers in September show an uptick in volume, its rates are still nearly 30 percent off those from a year ago.
Eng concluded his speech by saying that great opportunities exist for companies to add value to new and transformed supply chains. But to help guide shippers to opportunities in a new world order, transportation and logistics operators must be able to invest in assets and continuous innovation.