Maersk CEO Says No to Price War

Economic trouble in Europe and the U.S. have reduced shipping demand, Anderson says.

Industry shipping rates are steady or even slightly declining, but A.P. Moller-Maersk (Maersk) is rejecting a price war and hiking its rates, CEO Nils Anderson told Reuters.

Anderson, who declined to detail the planned rate increases, said the Danish shipping and oil group is now aiming to maintain rather than increase market share.

"It may be a little new to industrial thinking, but we just can't afford to go into a price war because the general market is going down," he said.

He said industry rates are generally stable but have fallen slightly from Asia to Europe, and Maersk's rates are now too low to cover its costs for traffic in that direction.

Anderson, whose company carries more than 15 percent of all seaborne containers through its Maersk Line shipping subsidiary, said industry shipping from Asia to Europe fell by about 8 percent in June and by 14 percent in July as Europe coped with its economic crisis.

"We see the U.S. actually being in recovery ahead of Europe, though that doesn't mean it will return to the glory days," he said.

"People are worried and there's good reason for that, because the economies are over-leveraged."

Anderson said a growing middle class in developing markets will help increase demand in the long-term, but the problems in the U.S. and Europe are hampering growth elsewhere at the moment.

Maersk Line had a profit of $227 million on revenues of $7.3 billion in the second quarter of 2012 after experiencing losses in first quarter and in fiscal year 2011, according to its quarterly report.

The shipping company increased its shipping volumes from Europe to Asia and within Asia and reduced its employee headcount during the quarter.