Maersk prepared to outlast its rivals
November 17, 2011
AP Møller-Maersk, owner of the world’s largest container line, has revealed it is ready to outlast its rivals, as the industry faces a possible four years of overcapacity.
Throughout this year, containership owners have seen billions of dollars wiped off the value of their fleets.
Massive overcapacity has squeezed not only freight rates, but also the worth of steel on the water.
The world’s largest boxship owner, AP Møller-Maersk (APMM), has seen the value of its containership fleet fall 24% in the past 12 months. Its 222 vessels currently in service are now worth US$9.1 billion, compared with $12 billion at the start of November last year.
Similarly, major owner and operator MSC’s fleet of 202 containerships in service are worth $6.9 billion, compared with $8.4 billion 12 months ago.
In a revealing interview yesterday, APMM CEO Nils Smedegaard Andersen said: “We are actually quite well positioned for a longer stretch of tough competition,”
He added: “It would be natural if the smaller players in this business, or their banks, start questioning whether it’s a good idea to keep competing.”
Maersk Line, with almost 16% of the global container market, is betting it can outlast such publicly traded competitors as Japan’s MOL and NYK, both of which have cut capacity to cope with falling freight rates.
Success may help reverse a Maersk share decline this year of 28%, compared with a fall of 17% in the OMX Copenhagen 20 Index.
At the beginning of this month APMM revealed that Maersk Line, which is often regarded as a barometer of global trade, posted a third-quarter net loss of Dkr1.58 billion (US$293 million) compared with a profit of Dkr5.9 billion a year earlier.
Courtest of IFW
