Shipping Industry Left With an Empty Feeling

(Chris Sorensen — Toronto Star)

Companies struggle as cargo transport demand sinks so soon after a remarkable boom period

After years straining to keep pace with rising demand, the global shipping industry is suddenly facing a new problem: finding places to park empty planes, trains and ships.

From railroad boxcars to giant container ships, the global economic downturn has forced transportation companies to shrink capacity in response to declining demand for raw materials and manufactured goods.

In Canada, both of the country’s major railways are being affected by fewer shipments of everything from iron ore to automobiles. […]

Eivind Kolding, the CEO of Maersk Line, the world’s largest container shipper with 15 per cent of the global market, predicted yesterday that the container business would take longer to recover from the economic downturn than other sectors precisely because of the surplus of new ships that will soon be plying the seas.

“More likely than not we will see all liner companies in red (ink) territory in 2009,” Kolding said in an interview with Reuters. “Most likely, some liner companies will have to cease business if freight rates do not come up.” Read more here.