Maersk Line Seeks Europe-Asia Profitability with Triple-E Ships

The first of the company's Triple-E ships was named Mærsk Mc-Kinney Møller

With the unveiling of the first of its Triple-E ships, Maersk Line says it hopes greater efficiency provided by the largest-ever container ships will help it improve the economics of shipping in the face of an industry rate war, Reuters reports.

"Hopefully the ships will help us to get closer to profitability on Asia to Europe," said Maersk Line CEO Soren Skou.

Freight rates for Asia-Europe routes have dropped 60 percent since mid-March due to fierce competition in the oversupplied industry.

"It is probably the fastest rate drop we have seen ever," Skou said.

At a ceremony on Friday at the Daewoo Shipbuilding & Marine Engineering (DSME) shipyard in Okpo, South Korea, the new Triple-E ship was named Mc-Kinney Møller after the late owner of the company, who was also the son of the group’s founder.

The $185-million Triple-E ships are 400 metres long and 59 metres wide with a capacity of 18,270 twenty-foot equivalent units (TEU).

"If the ships are filled, they will carry cargo more cheaply than any other vessels on the seas," said economist Marc Levinson.

"If they're half-filled, they will lose enormous amounts of money."

Skou said the ships, which use about 35 percent less fuel per TEU than the smaller vessels they replace, will be filled.

"Volumes are pretty strong at the moment," he said.

Skou also said the new ships will not add to the market's overcapacity because the company will remove other vessels from service, but Levinson disagreed.

"The container shipping industry already has much more capacity than the world needs," he said. "The Triple Es will add to that overcapacity, forcing rates down."

Mærsk Mc-Kinney Møller will be received by Maersk Line on June 28 and will start service on July 15, with the company taking delivery of four more of the ships this year, and another 15 will arrive in 2014 and 2015.

China Shipping Container Lines Co. Ltd. (CSCL) has also ordered five triple-E containerships, and United Arab Shipping Co. (UASC) is also reportedly considering ordering five of the ships to start its own Europe-Asia service.