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Peak season for liners

International shipping lines servicing the transpacific and Europe trades meanwhile are optimistic about this year's peak season. While earlier reports showed the transpacific trade starting at a much slower pace in June compared with last year, container traffic picked up abruptly in August.
September and October bookings, carriers noted, are slowly eating up what is left of capacity in the market.

Maersk Filipinas, Inc. president Kim H. Sorensen said the company is starting to "hit the roof" once again, that is Maersk vessels are sailing full. Still, he said, volumes that can be carried during the peak season are limited – unless carriers decide to inject extra capacity.

Sorensen said this year's peak season did not take the company by surprise as it did last year when the base was low to begin with. "Last year was a very depressed year. When the peak season came, growth therefore showed a steep upward curve."

Maersk had met its third-quarter projections but can no longer exceed that because capacity has been allocated.

The vessels are not there. There's just no capacity and you can look anywhere in the world right now and you will see that there is no vessel available so it's pretty difficult for the carrier to get that new capacity. Plus, the costs of vessels are growing immensely," he said.

The Danish carrier sees this year's performance as stronger than 2002's.Sorensen said this Christmas may not be very merry, although the carriers are more hopeful in the next two years.

"Last year, the volumes picked up during the peak season but then again, the rates were still low so a lot of carriers suffered. Based on suppliers' forecasts, we have clear indications that supply and demand will be good for us in 2004 and 2005," he said.

According to him, the company sees high utilization of all vessels and slight increases in rates.Maersk's key commodities are garments, apparel, food products and electronics.

APL, also a major transpacific carrier, disclosed that since late last year, there have been signs of an improving operating environment for the container shipping industry. The balance between supply and demand continued to be favorable and this has enabled a significant recovery in rates, it added."As we moved into the second half of the year, space proved to be even tighter and this is reflected in the increase in average freight rates year-on-year seen in our August 2003 operating performance which showed a 26% increase in average freight rates from $2,176 per forty-foot equivalent unit (FEU) to $2,739 per FEU for August 2003," said APL managing director Teng Kok Ng

The shipping firm maintained a positive outlook for the Philippine market as with other trades. Performance has improved significantly from last year, particularly in freight rates. "This has been a result of APL's ongoing focus on high-yield cargo and a recovery in freight rates generally," Ng noted.APL is also experiencing tight space particularly in the Philippines-Europe trade. Commodities moving in this trade include garments, canned produce, furniture, electronic goods/computer hardware and coconut products.

The strong first-half results points to a turnaround in performance from the previous year, NOL – APL's mother company – reported.

"Barring unforeseen circumstances, APL's continued focus on high-yield cargo and greater exposure to long-haul trades should result in significantly better results for the second half of the year," Ng noted.

Meanwhile, Atiko Trans, Inc. vice president and general manager Efren B. Caboteja said while long-haul carriers are experiencing an upsurge in peak season volume especially in the US and Europe trades, there has been a slump in Asia.

"Regional commercial feeders like us suffered losses in the third quarter É (we're still) recovering from the effects of the US-Iraq war, SARS and the Pacific Rim slowdown," he explained.Compared with last year, the level of growth is lower this year. The company experienced flat growth in August and its third-quarter projections have not been met.

Caboteja said terrorism was a big dampener to shipping this year. "The Bureau of Customs and the ports recorded negative imports for August. The government has accepted that exports can only grow by 3% this year from the earlier estimate of 5%," he noted.


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