Container ship lines can improve on last year’s
results if they continue to trim costs and control capacity, Maersk Line CEO Soren Skou said in the keynote speech to the JOC’s 13th annual TPM
Conference.Skou said global vessel capacity is expected to rise 10 to 11 percent this year while demand rises only 4 to 5 percent. He said, though, that the gap could be bridged by scrapping, idling and slow-steaming of
vessels.“These are the three levers we can use,” he said. “We have to be able to live in a world of overcapacity.”Maersk posted operating profit of $461 million last year, a
turnaround from a $553 million loss a year earlier, as revenue grew 8
percent to $27.1 billion.Skou said 2013 presents container lines with a bigger challenge, but that the industry is becoming “smarter” about matching capacity with demand.He noted that carriers skipped 31 sailings totaling 182,000
20-foot-equivalent units during the recent Chinese New Year, when ships
otherwise would have sailed largely empty.Carrier profits have been hurt by an oversupply of big ships in the
Asia-Europe trade, but Skou said a shift in Asia-to-U.S. East Coast
routings to Suez Canal transit from the Panama Canal is providing a
relief valve.Just five years ago, 90 percent of Asia-U.S. East Coast routings were via Panama. That ratio has dropped to 60-40 as carriers have deployed
larger, more efficient ships from Asia-Europe routes.Vessels bumped from Asia-Europe are being shifted to other routes,
where they’re displacing smaller, less-efficient ships that are being
returned to non-operating owners or sent to the scrapyard, he said.“This trend, in my view, is going to continue,” Skou said. In
addition to rising bunker costs, carriers’ Panama Canal tolls for
Panamax container ships have risen to $450,000 from about $250,000
since 2006.Maersk plans to take delivery this year of five of 20 Triple E ships, which will have nominal capacity of 18,000 TEUs each, but those vessels won’t be fully deployed until 2014. He reiterated that Maersk would
keep its capacity in line with market demand in Asia-Europe, where the
big ships will be used.Trans-Pacific rates being negotiated this spring “will be higher this year than last year,” Skou said. He said Asia-U.S. rates have been
essentially flat and that carrier margins on earnings before interest
and tax have averaged just 1 percent since 2006, a situation he called
unsustainable.He said Maersk is “fairly optimistic” about growth of the U.S.
market. He cited recovery of the housing industry and upward trends in
other economic indicators. Europe’s economy remains sluggish, but Skou
said carriers must cope with it.It’s unrealistic to expect container market growth to return to the
nearly 10 percent annual average it enjoyed between the mid-1970s and
2008. Carriers must recognize that and deal with it, he said.
CONTAINER
11 March 2013 - 08:33
Video From TPM: Maersk's Skou Optimistic on 2013
Container ship lines can improve on last year’s results if they continue to trim costs and control capacity, Maersk Line CEO Soren Skou said.
CONTAINER
11 March 2013 - 08:33
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