SINGAPORE's Neptune orient Lines (NOL), which owns APL, the world's sixth largest container shipping company, has posted a US$478 net loss, drawn on revenues of $9.21 billion, down two per cent.
    The company attributed losses to high fuel costs and overcapacity as well as a weakening global economy. "If these conditions continue, financial performance will remain weak," said statement accompanying the results.
"Overcapacity and higher fuel costs have negatively affected the whole container shipping industry," said NOL chief executive Ng Yat Chung. "We are urgently addressing costs and all other factors under our control to improve performance."
    Mr Ng said the industry's performance was "disappointing", a view shared by most every container shipping line this year. Chile's CSAV incurred a $1.24 billion net loss on $5.15 billion revenue. Maersk, the world's biggest container shipping line, is also expected to announce losses on Monday, said London's Financial Times.
    Overcapacity is said to be caused by market share rivalry, widely assumed to be initiated by Maersk, determined to deploy the economies of scale of their megaship fleet. This brought about a 10 per cent decline in freight rates which offset the five per cent gain in container volume increase, a situation worsened by a 33 per cent increase in fuel prices over last year.
Maersk's move has since been countered by rivals banding together to provide similar economies of scale. The result has been overcapacity, aggravated by a fragile global economy.
    Perhaps in response, Maersk has announced last week that it is withdrawing nine per cent of its capacity on the big-ship Asia-Europe route, a sign that the market share war is coming to an end, noted the FT.

(source:shipping online)