The practice of "slow steaming" - running ships at lower speeds to conserve pricey fuel - is increasing demand for container ships on global trade routes, Seaspan Corp. chief executive officer Gerry Wang said.
Because customers still want goods delivered on the same schedule, slow-steaming means more ships are required to deliver the same amount of goods - so a shipping line, through redeployment, might run nine ships on an Asia-Europe route that used to operate with eight, he said. Seaspan, which is incorporated in the Marshall Islands and has executive offices in Hong Kong and Vancouver, leases container ships to major shipping lines. Slow-steaming, along with increased Asia-Europe container traffic, is driving container ship demand and makes a potential glut of big new ships less likely, Mr. Wang said on a conference call. "I'm not 100-per-cent sure that even with all the big ships coming on in 2009 that there will be oversupply," he said. Shipping lines have in recent years ordered more than 100 post-Panamax (too big to fit through the Panama Canal) vessels, raising speculation of a glut of container ships. The company reported a first-quarter loss of $37.7-million (U.S.) or 65 cents a share on sales of $54.2-million for the three months ended March 31, compared with a profit of $14.7-million or 31 cents a share on sales of $41.2-million for the same period the previous year. Seaspan reported "normalized" earnings, which exclude non-cash losses from interest rate swap agreements, of 28 cents a share, a penny off an analysts' consensus estimate of 29 cents. The company said it is redeploying ships to Asia-Europe routes as that traffic picks up and Asia-North American shipments soften. Asia-Europe traffic is estimated to have grown by 17 per cent last year compared with 6.9-per-cent increase in Asia-North America cargo.
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