Container shipping slows, but not all bad news

Asia - There's a lot of pressure on the shipping industry to cut costs, but Asia Pacific CEO of Maersk Line Jesper Praestensgaard believes it's not all bad.

"There is going to be pressure on the container shipping industry going forward into 2008, but it isn't an industry that is all gloom and doom - there is still healthy growth," said Praestensgaard.

The shipping industry is expected to continue growth this year but at a slower rate than last year's 10%, he said.

Speaking at a media briefing celebrating Maersk Line's 80th anniversary, Praestensgaard said the three major challenges facing the shipping industry in the coming years are rising costs including the costs of fuel and steel, compliance with environmental issues, and the cyclical nature of shipping.

He added that with these market pressures, it was imperative that shippers continue to drive efficiencies within the organisation. Apart from producing larger ships, one of the initiatives Maersk Line is embarking on is standardising and simplifying its operations and the way it deals with its customers.

"We have to eliminate unnecessary complexity and cost," he said, adding that the processes in which shipping lines customise their services for their clients can be cumbersome and error-prone.

One of the ways the company aims to cut complexity is with its youship.com site, an alternative shipping service for small businesses, powered by Maersk Line. With the web portal, customers are guaranteed space, have access to immediate pricing information and can make decisions on the spot.

Praestensgaard said the next step for the industry is to work closely with customers and other supply chain stakeholders to pursue new ways of increasing efficiency.