Statistics from the National Development and Reform Commission showed that since September 2008 the number of small and medium-sized export-oriented Chinese companies closing their operations has been on the rise, leading to a reduction in port handling capacity. As exports dwindled and market demand fell, shipping companies were forced to cut cargo fees.

China COSCO figures also showed that in the five months after the financial crisis broke out, the freights on the three major routes between China and Europe, North America and the Middle East experienced considerable drops. Freights to Europe, the Middle East and North America fell by 30.8 percent, 13.4 percent and 10.5 percent, respectively.

Although ocean-shipping freights have risen in recent months, the increase is limited, with the price standing at a much lower level than that prior to the financial crisis. The China COSCO announcement states that the ocean-shipping industry is currently stuck in windless seas.

Good news won't come soon

When the sub-prime mortgage crisis emerged in 2007, China COSCO established a team to seek solutions to avert the financial dilemma brewing in the United States. Primarily seeking to avoid substantial losses and the risk of capital chain disruption brought about by the bankruptcy of U.S. banks, the team formulated a reliable plan: China COSCO should immediately transfer its debts in U.S. banks back to Chinese banks and then transfer its deposits in foreign banks back to Chinese banks as soon as possible. In the meantime, the company would need to cut unnecessary investment to secure its cash flow.

While trying to maintain normal operations on its existing routes, the company tried to adopt measures to control costs, according to China COSCO. After the financial crisis broke out in 2008, China COSCO attempted to reduce oil consumption and emissions on 17 of its routes. When the transport capacity rose by 14.1 percent, oil consumption fell by 3.9 percent last year. The company also grasped the opportunity to increase its transport capacity on domestic routes, witnessing a rise of 6.2 percent year on year.

However, these measures have been only slightly effective. The difficult situation faced by the ocean-shipping industry has remained unchanged.

The continued slowdown in market demand has been the biggest challenge to container shipping companies, China COSCO stated. The recovery of the economies and trade volumes in Europe and the United States—assisted by the implementation of economic stimulus plans and the decreasing inventory of retailers—will help guide the container shipping market into positive territory.

Since April 2009, the transport capacity of trunk routes and some secondary routes have recovered, with cargo fees rising to some extent. But compared with the same period of previous years, a truly "busy" season has yet to be seen.

China COSCO continued to suffer losses in the third quarter of this year, a year after the onset of the financial crisis, indicating that the ocean-shipping industry is still struggling in the shadow of the crisis. Already, dozens of shipping companies worldwide have ceased shipping operations, unable to ride out the storm. In June, Eastwind Maritime Inc., a U.S. shipping company, declared that it had filed for bankruptcy protection since it was unable to pay back its nearly $1 billion of debts.

Most industry insiders are pessimistic about the future of the ocean-shipping industry. Since container shipping mainly reflects developed countries' consumption demand for finished products, the industry has actually been operating at a low level since 2005. The present situation is much more dire, as demand from the European and U.S. markets continues to shrink and freights remain at low levels, leaving little hope that the industry will make any considerable gains in the near future.

During the current round of economic rebound in China, with a resumed demand for steel products and rising coal consumption brought by increased power generation volume, the dry bulk business has become the most eye-catching sector of the shipping industry. However, the potential withdrawal of economic stimulus packages and the adverse effect of the excessive production capacity in China have left many concerned about how long the upswing in the dry bulk market will last.