Sunday, 14 October 2012 | 00:00
Danish industrial conglomerate A.P. Moller-Maersk A/S is targeting to raise the earnings margin of its container shipping arm, Maersk Line, to 5% higher than its peers over the next five years, Maersk Chief Executive Nils S. Andersen said.
Speaking at the company’s meeting for investors and analysts, Mr. Andersen said Maersk Line, the world’s largest container shipping firm, is ready to assume market leadership on rates, to push up freight rates from a very low level currently and support profitability.
Speaking at the company’s meeting for investors and analysts, Mr. Andersen said Maersk Line, the world’s largest container shipping firm, is ready to assume market leadership on rates, to push up freight rates from a very low level currently and support profitability.
Maersk suffered from poor rates and a large over-capacity in the market in 2011, and after a brief recovery of rates at the beginning of 2012, rates have plunged again in recent months, not least on the key Asia-Europe trade, which accounts for about 40% of Maersk Line’s total carried freight volumes.
Maersk has announced it will attempt to push through marked rate hikes this fall, on Asia-Europe of $500 per standard 20-foot container.
With the focus now on profitability, Maersk aims to grow with the market in the coming five years and thereby keep its current global market share unchanged at about 15%.
With the expectation of sluggish growth in world trade and continued over-capacity in the shipping market, Maersk will shift its main investment focus to its three other core business areas-oil, drilling services and port operations-resulting in a drop in Maersk Line’s stake in total investments.
Including Maersk Line, the core business areas accounted for 75% of the group’s investments in 2011, of which 38% were invested in Maersk Line. In the coming five years, Maersk Line’s stake of group investments will decline to between 25% and 30%.
A gradual shift in the balance between container shipping, currently Maersk’s largest business area, and the other core businesses will serve to bolster the group’s bottom line against the traditionally large degree of volatility in shipping rates going forward, Mr. Andersen said.
Source: Manila Bulletin
