SINGAPORE - The global shipping industry, still struggling to recover from the 2009 recession, is worried by overcapacity and the expected growth slowdown in China, a conference was told Wednesday.
"Many shipowners, especially in Asia, perhaps have been shielded from the severity of the current economic crisis by the seemingly inexorable growth of China," said Simon Bennett, external relations director with the International Chamber of Shipping.
"But even this beacon of light cannot be guaranteed," he told a maritime conference in Singapore.
China has cut its economic growth target to 7.5 percent this year from eight percent in 2011 in anticipation of weaker European and US demand.
"Much of the industry is still struggling with the serious consequences from the contraction of global economic activity in 2009," Bennett told AFP on the sidelines of the conference.
"If the eurozone goes into full recession or even worse, implodes, the implications will most certainly be global."
Lim How Teck, director of Rickmers Maritime Trust which owns and operates container ships, said an oversupply of vessels was also affecting the industry.
He told the conference that shipowners boosted their fleets between 2007 and 2009 in anticipation of stronger demand.
Most shipowners "followed the herd instinct" to buy large vessels to improve efficiency, said Lim.
"But there is a tendency to forget that to enjoy efficiency you must be able to fill up the ships," Lim said.
"There is no point having a unit cost that is halved if you can only fill up half the ships."