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Global Shipping Outlook is Still Gloomy

“The world’s largest container shipping group, Denmark’s A.P. Moeller-Maersk, expects shipping demand on routes between Europe and Asia to be “bleak” in 2013, leading to a very small increase in overall shipping demand of 4% to 5%. While that will weigh down the entire industry, a lack of demand for container shipping often serves as a bellwether for international trade and, to some degree, the global economy.

The main problem for Maersk and other major container shippers is overcapacity, which is driving down rates. The industry solved the problem in 2012 by raising freight rates, but now that Maersk and the others are turning a profit, shippers are unlikely to grant them further rate increases with so much capacity going unused. More likely are demands for cuts in freight rates….”

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