Malaysia’s shipping industry is asking for relief funding, saying many local ship owners are going belly up due to heavy losses as a result of the unprecedented and prolonged downturn in the global shipping sector since late 2008.
Malaysia Shipowners’ Association (Masa) chairman Nordin Mat Yusoff said five of the 10 local shipping companies listed on the Malaysian stock exchange have been categorized as either delisted or distressed in the last couple of years, and appealed for government intervention to help save the industry from “extinction.”
Masa is proposing a relief fund to assist financially distressed companies and a refinancing scheme to help affected shipowners.
“We would like to appeal to the government to consider a relief or rescue fund to assist financially distressed firms as well as a refinancing scheme to help companies trapped with distressed assets,” Nordin said in a recent speech at the 35th anniversary celebration of the Sabah and Sarawak Shipowners Association.
Meanwhile, the Taiwan box ship industry expects that improving business conditions in the United States and Europe will boost the global economy’s recovery, which will spell a better outlook for Taiwanese shipping lines.
Hsieh Chih-jien, vice president of Evergreen International, and Lu Feng-hai, chairman of Yangming Marine Transport, said they look forward to brighter shipping conditions this year.
Lu Feng-hai expects shipping rates to pick up gradually in 2014, compared to a decline last year. In the first half of this year, rate hikes are scheduled to take place for the U.S. route in March and May.
Hsieh Chih-jien said the rosier GDP growth forecast of the International Monetary Fund for the United States, Europe, and the world will make for brisker trading activities in 2014.
On the supply side, Lu Feng-hai said overall container shipping capacity will expand at a scale similar to the 2013 level, but growth of effective capacity may be slower due to increased ship dismantling, reduced shipping speed, and suspension of shipping routes.