![]() ![]() “It all boils down to supply, demand and who will blink first.” “The bigger companies such as Maersk and Hapag-Lloyd have the cash to wait and focus on cost-cutting, as opposed to aggressive capacity reductions – for now,” he said. Mr Kovatchev said what is emerging is a stand-off between the strong and the weak. In prolonged slumps, they can also let charter contracts expire, idle some ships or sell old ones in the scrap steel market. To manage capacity in the short term, the main tools at the carriers’ disposal are cancelling individual voyages or suspending services entirely on trade lanes where demand is weak. ![]() So timing their launch and retirement with the ebbs and flows of the business cycle is inherently difficult. It can take two to three years to build a container ship, which typically operate for about 25 years. Such concern stems from a combination of economic forces: Goods demand is returning to pre-pandemic levels just as supply is rising in the form of new, bigger ships. ![]() “Price wars after a while hurt not only those who start them, but everyone.” “Each actor will have to be responsible to ensure that the market remains reasonable amid rates that are relatively low,” CMA CGM chief financial officer Ramon Fernandez told reporters on Friday. ![]()
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