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Thursday, July 09, 2009

Merchant Fleet Needs 20% Cut on Oversupply, Louis-Dreyfus Says

Thursday, 09 July 2009

The global merchant fleet needs to be cut by 20 percent to eliminate a glut of vessels caused by the global recession, shipowner Philippe Louis-Dreyfus said. "I don't see how current freight demand can solve the overcapacity crisis," Louis-Dreyfus, president of Louis-Dreyfus Armateurs, said at a conference in Brussels, according to an e- mailed statement distributed by London-based public relations firm Bell Pottinger. The cost of hauling commodities by sea fell by a record 92 percent last year and declined 14 percent this month. In May, rental income from leasing supertankers fell so low on some routes that owners had to pay toward fuel costs to get their carriers to more profitable markets.
Neptune Orient Lines Ltd., a container shipping line, posted its biggest quarterly loss in at least seven years in the three months ended April 3.
The shipping line has a fleet of 60 ships, according to the company's Web site, including 20 commodity transporters, and vessels operating in the offshore oil industry.

Source: Alaric Nightingale, Bloomberg