Container shipping lines cannot get out of the large vessel arms race and excess capacity will be a permanent problem, according to Orient Overseas International Ltd. chairman Tung Chee Chen.
“In the past when there has been a recession, after one to two years the industry started to recover and the game continued. It became a hiccup. This time around we are into the sixth year of recovery and consumer spending growth is still weak.”
Instead of this putting the brakes on ship orders, the opposite has happened. “Container shipping CEOs have huge egos. In good times we all want to increase our profitability and try to build size, believing the size can be absorbed while we gain efficiency and profitability.”
