Nanjing Forstar Fruits and Vegetables Co.,Ltd

Just how much has demand for goods shipping in containers from Asia decreased this year? According to the Transpacific Stabilization Agreement, which represents 15 ocean carriers in the Pacific, Asia to U.S. container cargos dropped 6.9% in the first half of 2008 and could end the year down as much as 8% from last year.

And officials from TSA are not predicting a rebound in cargo demand until the second half of 2009. "Clearly we're in a slowdown right now, but just as clearly, the current freezing up of the global credit system is unsustainable," said TSA chairman Ronald Widdows in a statement. "We expect to see an orderly de-leveraging of the financial markets over the next year that will begin to restore confidence with year-on-year cargo demand growth resuming in late 2009."

In a recent report, Philip Damas, director of research at Drewry's ship consultancy in London, said that the growth of container trade is at its lowest level ever from Asia to the U.S. this year, and was at a 15-year low from Asia to Europe. "As a result of the financial crisis we are seeing consumers buying less clothes and furniture and we've even got the start of bankruptcies for furniture importers," he said.

Data from HIS Global Insights says the number of shipping containers entering the U.S. through its top 10 container ports between January and September was 7.2% lower than it was during the year-earlier period. Global container shipping giant Neptune Orient Lines said in mid-November its traffic declined by 1% to 186,500 boxes in the four weeks ended October 17, its first decline in three years.

As a result of such declines in demand, many carriers have already cut back on capacity or lanes. Most recently, Horizon Lines announced it was cutting back its non-union workforce by 10% in an effort to save $10 million. "We continue to face a very difficult macro-economic environment that is having a significant adverse impact on the markets we serve," said Chuck Raymond, CEO of Horizon Lines in a statement. "We expect these challenges to continue through at least 2009 and are taking the appropriate, necessary steps to adjust our business."

Also recently, China Shipping Container Lines Co. posted a third-quarter loss while Danish shipping giant A.P. Moeller-Maersk, the world's largest shipping company by market value, said in October it plans to reduce capacity on Asia-Europe routes 10%.

And with demand down, ocean container shipping rates have so dramatically in the past quarter, some shipping lines are reportedly refusing what cargo there is because the going rates are below operating costs—meaning the carrier would lose money by taking the business in certain lanes. Reuters reports that A.P. Moller-Maersk's Maersk Line is removing 7,600 twenty-foot equivalent units (TEU) per week from its Asia-North Europe lanes because, "The current Asia-Europe market is characterized by unsustainable rate levels," according to Maersk officials.

The Maersk move came only days after Neptune Orient Lines said its container shipping business APL will reduce capacity in transpacific trade by around 20% and reduce capacity in Asia-Europe trade by around 25% by suspending certain service offerings. APL said the moves were made "in response to increasingly challenging conditions in the major container trades."

But despite these cuts, market watchers expect a continued growth in containership capacity in 2009. In a recent note to clients, Ed Wolfe of Wolfe Research, said "While ocean capacity began to relax with this summer's spike in fuel, global demand has weakened even further through October and likely thus far into November. Next year, containership capacity additions will likely match this year's 13% growth (equating to an additional 1.8M TEUs of capacity globally), met with limited, if any, anticipated growth in demand."