China's largest container shipping line, China Cosco Holdings, has said it is confident the rate increase it asked for along with the 14 other members of the Transpacific Stabilisation Agreement (TSA) will be approved.
China Cosco President Zhang Liang said during a 12 March interview in Beijing that he was 'full of confidence' regarding the ongoing negotiations.
'The full recovery has yet to come but we are on the road to recovery,' he said.
TSA member lines are seeking a US$800 per forty-foot container rate increase on US west coast routes, Business Week reported.
Spot rates have risen by around 50 per cent this year to around US$2,100 according to shipping hedge-fund group Tufton Oceanic Ltd, as US retailers start to recover after the economic crisis.
'Cosco is likely to achieve the planned increase as rates are still below break-even,' said Johnson Leung, an analyst with Tufton Oceanic.
'But, an early release of idled ships could jeopardise lines' plans,' Mr Leung said.
According to Mr Zhang, China Cosco may buy new or second-hand vessels this year following a drop in ship prices, and the company also plans to charter ships if rates decline as anticipated.
'We will grab opportunities in the market to optimise our fleet,' he said.
The move reflects a growing trend of optimism in the container shipping industry after a tough couple of years.
Hong Kong company Pacific Basin Shipping Ltd has also bought ships recently and said it plans to expand its fleet while prices are low, as does China's second largest seafreight company China Shipping Group.
Cosco has forecast a profit for the first quarter and for the full year, according to executive vice president Zhang Fusheng, and the world's largest shipping company, AP Moeller-Maersk A/S, has predicted a modest profit for 2010.
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