By Sabina Zawadzki

COPENHAGEN, Nov 4 (Reuters) – Maersk Line, the world’s largest container transport firm, stated on Wednesday it’s going to slash prices, lower workers by nearly a fifth and pull out of vessel orders as commerce alongside the busiest routes on the earth, from Asia to Europe, slows down.

The enterprise, a part of the A.P. Moller-Maersk conglomerate , is a bellwether for international commerce and the transport trade, which is run primarily by unlisted firms not required to make their assessments or monetary circumstances public.

The plans come two weeks after A.P. Moller-Maersk lower its 2015 revenue forecast by 15 p.c, blaming a slowdown within the container transport market.

Maersk will report its third quarter earnings on Friday.

“A number of markets have disappointed with a lot weaker demand than expected this year,” Maersk Line Chief Executive Soren Skou instructed reporters on a convention name.

“And it’s first of all Asia to Europe, which has had negative growth. Europeans have been importing less this year from Asia than last year and that was frankly a surprise.”

Raw materials commerce routes, comparable to West Africa and the east coast of Latin America, had additionally slowed, Skou stated, as a result of “what went up with China, went down with China,” Skou stated.

China’s manufacturing unit exercise fell for an eighth straight month in October, a non-public survey confirmed on Monday, pointing to continued sluggishness on the earth’s second-largest financial system.

The price of transporting a container has slumped this 12 months in comparison with already weak earlier years attributable to overcapacity within the transport market as commerce volumes didn’t get well from the 2008 monetary disaster.

Weekly freight spot charges on Asia to Europe routes have been languishing under $1,000 per 20-foot container, based on the Shanghai Containerised Freight Index, spending all however 5 weeks of the 12 months at or under ranges deemed worthwhile.

SHIPOWNERS “DIGGING THEIR GRAVES”

Maersk Line stated it might save $250 million within the coming two years and scale back its workforce by 17 p.c or 4,000 individuals, primarily by means of attrition. Its shares jumped on the announcement and so they closed 3 p.c increased.

The firm, with a fleet of 600 ships, ordered 27 new vessels this 12 months, together with 11 of its flagship Triple E mega-vessels that may carry about 20,000 20-foot containers, with an choice to order eight extra.

Now it says it is not going to train the choices, together with on six of the most important ships. The orders would have gone to Korea’s Daewoo Shipbuilding and Marine Engineering Co and China’s Cosco.

Overcapacity has lengthy been an issue within the trade and has been exacerbated by firms ordering new mega-vessels, dashing to put orders earlier than new environmental rules take impact subsequent 12 months, stated Jan Tiedemann, an analyst with transport consultancy Alphaliner.

“Shipping companies definitely ordered too much because they tried to get these ships with a Tier II compliance,” Tiedemann stated, referring to the brand new worldwide rules geared toward slicing nitrogen oxide emissions.

“What happens now is some who optimistically have done that are getting cold feet. They thought maybe we can get away with it – the ships will be delivered in 2017, the market would have recovered by then and now they say, ‘we’re digging our own grave’.”

Maersk Line stated it had not gone on a shopping for spree to keep away from the rules, noting its earlier order for brand spanking new ships was in 2011. (enhancing by Jason Neely, Susan Thomas and Adrian Croft)

(c) Copyright Thomson Reuters 2015.

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