AP Moeller-Maersk, the world’s largest shipper of containers, and Neptune Orient Lines Ltd, South-east Asia’s biggest, said demand is weakening because banks don’t want to finance trade during a recession.
‘Seaborne transportation of goods such as washing machines and other household appliances fell the most in at least 51/2 years in November, according to data published recently on the website of Neptune Orient Lines. Shipments dropped 12 per cent to 169,700 boxes in the four weeks to Nov 14, compared with a year earlier, it said. ‘We have in some trades received feedback from customers and the market that they are having issues with letters of credit,’ Michel Deleuran, head of network and product at Copenhagen-based Maersk Line, said. The issue is exacerbating ‘a lack of demand in individual countries’ as the global recession takes hold, he said. World trade in commodities, from oil and coal to timber and grains, has already been hurt by a reduction in the sums banks are willing to advance to customers to ensure payments. Maersk spokesman Michael Storgaard said on Oct 15 that container shipments of consumer goods weren’t affected at the time. Reduced supply of trade finance has ‘been a factor’ in Neptune Orient Lines reporting its largest year-on-year decline in shipments since May 2003, David Goodwin, vice- president of NOL Group corporate affairs, said in a statement on Dec 12. ‘The key driver behind lower demand for container shipping is the sharp reduction in consumer confidence and consumer spending globally,’ he said. The cost of shipping containers has declined ‘very dramatically’ and at ‘unprecedented’ speed, Mr Deleuran said. He declined to be more specific because shipping lines can breach competition rules by discussing what they earn.