MCC Transport, AP Moller-Maersk Group's intra-Asia feeder line headquartered in Singapore, is seeking to expand through forming new partnerships but has no plans to increase fleet size because rates are too depressed.
"We have come to the conclusion that cooperation is the only way to expand your product portfolio," MCC chief executive Tim Wickmann told Lloyd's List. "We are looking into opportunities where we can co-operate, where can reduce our own exposure.
"I would happily upgrade a service of mine and then use the entire additional space to give to other shipping lines in exchange for getting space on their corridors where MCC is not covering today," Mr Wickmann said.
"We have no plans to reduce the size of our fleet, but we haven't added anything for one and a half years and I don't think we will unless some interesting opportunities come up," he said.
The company has launched only one new service this year in intra-Asia.
"We are not the only ones to have reduced our services to focus on cost, but it's split 50:50 in intra-Asia, with half looking at the bottom line and half looking at continuously expanding without necessarily making money on it," said Mr Wickmann.
"We are not focusing on gaining market share and instead focusing on profit and this has been the case since early 2012."
According to the shipping line's chief executive rates on certain intra-Asia trade lanes have been "terrible" on account of capacity additions outstripping demand growth of around three to four per cent.
The oversupply situation is likely to get worse if the intra-Asia services receive panamax ships cascaded from other trade lanes.
"Some shipping lines may be forced to put in panamax vessels without actually wanting to do so and these can only go to certain ports because they are too big.
"The freight rates in those markets have been under severe pressure because vessels come in that nobody actually wants and it provides a capacity that the market cannot take.
"But it is probably better for those shipping lines to do that than laying them up somewhere in India."
The only way to make the addition of panamax ships a financially sound move would be to establish a joint service operated by three or four shipping lines that would deploy the larger vessels.
"Really, this is the only way to make such panamax vessels viable," he said. "That is the only way I could ever see it making economic sense in the current market."
Is MCC in talks to set up such a service? Not at the moment, said Mr Wickmann. However, "If somebody were interested in going down those lines, I hope they would call MCC. It is an interesting proposition."
WORLD SHIPPING
10 September 2013 - 21:44
MCC, Singapore-based Maersk intra-Asia feeder, looks to limit services
MCC Transport, AP Moller-Maersk Group's intra-Asia feeder line headquartered in Singapore, is seeking to expand through forming new partnerships but has no plans to increase fleet size because rates are too depressed.
WORLD SHIPPING
10 September 2013 - 21:44
MCC, Singapore-based Maersk intra-Asia feeder, looks to limit services
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