Battered shipping industry faces grim choices as demand for commodities falls

The shipping business has gone from bad to worse.

As global trade slows, owners of the ships that carry industrial commodities across oceans are reeling from falling demand for coal, iron ore and other industrial commodities, which has sent shipping rates to new lows. The decline has been hastened by an oversupply of ships ordered as the world’s economies recovered from the Great Recession.

Danish shipping and oil conglomerate A.P. Moller-Maersk underscored the depth of the slump on Wednesday when it blamed slumping trade and low crude prices for an 80-per-cent drop in 2015 profit, declaring conditions worse than during the financial crisis.

To reduce competition and cut costs amid falling revenues, the shipping industry is scaling back fleets and consolidating. State-owned companies China Ocean Shipping Co. and China Shipping Group have merged, and Neptune Orient Lines Ltd. of Singapore was recently taken over by France’s CMA CGM SA. Read More…