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JEREMY HOBSON: We got earnings this morning from the world’s biggest container-shipping company Maersk. The company has returned to profitability after a loss last year. And it says it’s ready to buy some new ships.
Marketplace’s David Gura reports now on what this says about the health of the global economy.
DAVID GURA: The bulk of what we buy abroad comes by sea.
Kevin Sterling: Just massive ships. Multiple, multiple football-field-sized ships.
Kevin Sterling is with BB&T Capital Markets. He says that during the recession, demand for shipping dropped and so did prices. Now the economy is turning around, but an anchor is still weighing the shipping industry down.
Sterling: If you kind of dig further in, demand is actually pretty good, it’s just the ship supply is overwhelming the situation.
Sterling says when the economy was hot, lots of companies decided to expand their fleets. But it takes a long time to build container ships and makers started delivering them just as the economy soured. Shipping companies couldn’t afford them, so they tried to push delivery dates back.
Sterling: The new delivery schedule is overwhelming. In fact, pretty daunting.
Maersk was cautious. It didn’t order as many vessels as its competitors. Instead, it refurbished its own fleet. Now Maersk is ready for its ships to come in.
In Washington, I’m David Gura for Marketplace.
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