Maersk Line will announce plans to cut its shipping capacity on Asia-Europe routes next week due to the impact of the euro-zone debt crisis on international trade, reported Dow Jones Newswires.

Tim Smith, the company’s chief executive for the North Asia Region, said overcapacity remains a key concern for the global shipping industry. Maersk Line is a unit of A P Moller-Maersk.

"I think it’s very clear now that we've seen, collectively, we're ordering more capacity than we really need for the short term," he said on the sidelines of a shipping conference in Hong Kong.

He added the company would consider idling more capacity after the Lunar New Year, which falls on January 23 next year.

While lingering concerns about the European debt crisis are weighing on demand for trade on European routes, Smith said the prospects for transpacific routes are better amid signs of a gradual recovery in the US economy.

Freight rates have plunged to unprofitable levels this year as a result of overcapacity in the market. Maersk Line said earlier it expected its container shipping business to post a loss for 2011 mainly due to weak rates on Asia-Europe routes.

Source: CargonewsAsia.