The box shipping industry, led by larger rivals A.P. Moller-Maersk and China COSCO Holdings, continues to recover from depressed levels in 2009 when the industry slashed capacity in response to the global downturn.
Analysts estimate the industry, which is closely linked to global economic growth, lost as much as $15 billion last year as container traffic tumbled by nearly 10 percent.
S.S. Teo, managing director of privately-held Pacific, based in Singapore, told Reuters the container market's recovery would be fueled by China's red-hot demand for semi-finished products and raw materials from other Asian countries.
"The Asia-Europe and Asia-U.S. markets will take two to five years to return to pre-crisis levels," said Teo, who is also the president of the Singapore Shipping Association and a member of parliament.
"But I'm not that pessimistic because the shortfall will be made up by the intra-Asia volume."
Intra-Asia Growth
Container freight rates are expected to grow by around 9 percent to $920 per twenty-foot equivalent unit (TEU) in 2011 from last year, shipping analysts with DnB NOR Markets, part of Norway's biggest bank, said this month.
That compares to an increase of around 3 percent for freight rates between Asia and the West.
"I don't think we can say the Asian market will decouple from the West, but we will continue to see the Asian economy become more resilient," Teo said.
PIL, ranked in the top 20 of the world's container ship companies, plans to add six new vessels by the end of 2012 to its fleet of 133 ships.
The family-run firm, which says its annual turnover is around S$3.8 billion ($2.86 billion), is not interested in putting itself on the market or going public.
"No one has approached us seriously. We are happy staying private," said Teo, who declined comment on the company's profit outlook for this year and next. (Reuters)
