THE chief executive officer of the Greek container shipping line Danaos, John Coustas, predicts rising freight rates on the back of solid demand for consumer goods from developing nations, particularly China.

"Unless something dramatic happens in the world's economies, I can't see any kind of correction this year," Dr Coustas was quoted saying in a Reuters report.

With a fleet of 31 containerships, Danaos has 23 more vessels on order for delivery by 2010. Dr Coustas is optimistic that growing global demand for container shipping will keep rates firm despite the record number of containerships due for delivery in the next few years and that shipyard order books are full worldwide until the end of 2009.

The 23 newbuilds on order are expected to eat up most of Danaos' US$1.4 billion revolving loan facility by 2010. However, the company is not ruling out "drawing on the loan sooner by ordering more vessels," said the company's chief financial officer Dimitri Andritsoyiannis.

Commenting on Danaos' move towards the end of last year to buy three used container ships from AP Moeller-Maersk and then lease them back to the Danish shipping giant on a five-year charter, Dr Coustas told the news agency to expect to see more deals like this with shipping lines. "But we have to be careful with them because the pricing is very fine."

He also brushed off concerns over a recent proposal by Panama Canal authorities to implement a sharp fee hike to offset the heavy cost of expanding to major waterway to accommodate larger containerships, saying it will have little effect on shipping. "The amount is so small that the impact will be negligible," he said.