Maersk Line, the world’s biggest container shipping company, is expected to lose money again this year despite recent freight rate increases, the chairman of parent group A.P. Moller-Maersk said.
A.P. Moller-Maersk, the Danish shipping and oil group, said in its annual report in late February that it expected its Maersk Liner Business to have a “negative result in 2012 as a consequence of excess capacity.”
That outlook was given before recent freight rate increases which had led some analysts to expect A.P. Moller-Maersk to upgrade guidance for the container shipping business.
But A.P. Moller-Maersk chairman of the board Michael Pram Rasmussen reiterated the same outlook for Maersk Line in his presentation to the annual general meeting of shareholders.
He also repeated that the A.P. Moller-Maersk group as a whole expected a positive full-year 2012 result, but below the result for 2011.
“Maersk Line will place specific focus on profitability, partly with rate increases and partly with increased competitiveness, achieved through continued savings and efficiency improvements,” Rasmussen told the meeting.
Maersk Line has regained market share lost during the previous downturn and reached a satisfactory level, he said. “The primary focus has therefore shifted to profitability.”
Rasmussen said that Maersk Line regained market share throughout 2011 and ended the year with a global market share of about 15.5 per cent, in line with earlier announcements.
But Maersk Line’s market share on its important Asia-Europe routes rose last year to 19.4 per cent from 17.8 per cent in 2010, and volumes on those routes grew 16 per cent, faster than average market growth of 7 per cent, he told the meeting.
He said Maersk intended to maintain its global market share and pursue its long-term strategy to grow with the market, adding that Maersk Line had made several initiatives in early 2012 aimed at achieving “satisfactory freight rates.”
Rasmussen said that Maersk Line had sought two increases, one of $750 per twenty-foot unit (TEU) and another of $400 per TEU, and it had achieved about $1,000 in total in the increases implemented on March 1 and April 1. “This is not done, there will be more,” he said.