Maersk warns Latin America of rate hikes, after vowing big investment
DANISH shipping giant Maersk Line has sounded the warning in Latin American of coming rate hikes in the face of higher fuel, steel, terminal and container costs after reporting a US$599 million first quarter financial loss. Saturday, 19.May.2012, 01:31 (GMT+3)
DANISH shipping giant Maersk Line has sounded the warning in Latin American of coming rate hikes in the face of higher fuel, steel, terminal and container costs after reporting a US$599 million first quarter financial loss.
"The goal is to boost profitability and safeguard the continuity of service levels. Fuel prices have risen 250 per cent, while Maersk Line's rates have dropped more than 10 per cent across Latin America," said a company statement.
Maersk Line said Latin America is important enough to warrant a US$2.2 billion 2011-2013 investment programme with the delivery of 16 new vessels, known as SAMMAX (South America Max) with a capacity of 7,500 TEU.
Other investments include $992 million in the Moin terminal, Costa Rica; $170 million in the building of a container factory in Chile; $200 million in construction of two supply vessels at Asenav in Chile; $450 million in Brazil's Santos terminal; $1.26 billion in Maersk Peregrino's FPSO in Brazil's Campos Basin and $3 billion in oil and gas exploration and acquisitions in Brazil, said the company statement.
"The shipping industry is losing money," said Maersk Latin America CEO Robbert Jan Van Trooijen. "Previously, we followed the downward market trend on rates to regain market share, but today we are happy with our position and see Latin America as a growth opportunity. To achieve this, our prices must reflect the current environment of higher fuel, container and terminal costs."
Maersk Line moved 183 million tonnes of cargo in 2011 and is the largest container carrier in the world. Latin America represents 14 per cent of Maersk container volume and the carrier has a 15 per cent market share in the region, said the company statement.
AP Moller-Maersk Group also includes terminal operations (APM Terminals), freight forwarding, supply chain management (Damco) and tanker (Maersk Tankers).