COSCO, ACL chiefs say box recovery may come mid-2009
COSCO Chief Executive Wei Jiafu said Monday he wouldn't be surprised to see a rebound in demand in the first half of 2009, Reuters reported.
“The financial tsunami affects real shipping demand,' Jiafu said at a ceremony marking COSCO Pacific's concession for Greece's biggest container port in Athens at the port of Piraeus. 'Shipping is diving due to the panic of investors ' but the diver has to come up eventually. The downturn in the shipping sector will not last for several years ' I hope in the first half of next year shipping demand will be back.”
COSCO Pacific is the terminal operating arm of state-owned COSCO, one of the world's biggest shipping conglomerates. The stake in the Greek terminal gives COSCO its first foothold in Europe.
Reuters reported that backlogs of containers in Greece have been caused by port congestion and dockworker protests in response to the COSCO deal. Jiafu said Monday that the redevelopment plan for the terminal — in which COSCO intends to invest more than $4 billion over the course of the 35-year concession — would create more than 1,000 jobs in the port.
Nevertheless, a 24-hour strike by dockworkers was planned to coincide with the official signing of the concession today.
Meanwhile, Andy Abbott, CEO of Atlantic Container Lines, told American Shipper Monday he too expects a surge in demand in the middle of 2009.
With the current economic gloom keeping many shippers from placing normal orders in Asia during the fall, inventories will be bare after the traditional post-Christmas/Chinese New Year low season. That could precipitate a surge in spring.
'So many people expect it to get a lot worse and so they're holding off on purchasing,' Abbott said. 'But I wouldn't be surprised to see a spike in May with the pent-up demand. There's going to be a lot of empty inventory by then.' ' Eric Johnson