Ship group UASC targets expansion to beat container market blues
* UASC expects to reach volume of 2.35 mln TEU in 2014
* Global carriers still struggling with weak conditions
By Jonathan Saul
LONDON, Oct 24 (Reuters) - United Arab Shipping Company (UASC) is on a major expansion drive, investing more than $2 billion in bigger ships and forming alliances with peers to boost efficiencies and ride out tough markets.
The shipping industry has been battling overcapacity, linked to a glut of new vessels ordered during a boom period before the global financial crisis of 2007-2009, forcing operators to look for ways to overcome one of the worst slumps on record.
Despite the oversupply, companies are looking to ditch older and smaller container ships for fewer but larger ones - aiming to command better economies of scale and cut fuel costs.
"Size matters in this business," said Jorn Hinge, the Middle East group's chief executive and president. "We are in expansion mode," he told Reuters in an interview.
"With the economic disasters of the past number of years, it has not exactly been good for consumer confidence. Although container trades are growing, they are growing at a lot slower pace than people had planned for," he added.
Container ships transport consumer goods such as electronics and food in metal boxes, with a standard length of 20 feet (6 metres), known as TEU (20-foot equivalent units). The world's biggest container group Maersk Line, with nearly 600 vessels, carried 17.6 million TEU in 2013. Continuación...