Maersk Line Calls For More Consolidation of Container Lines

by Ship & Bunker News Team
Monday October 12, 2015

Maersk Line CEO Soren Skou is advocating for more consolidation in the containership segment as low freight rates and overcapacity continue to plague carrier lines, The Wall Street Journal reports. 

"We are getting the expected benefits from vessel-sharing agreements, but more can come from consolidation," Skou said, though he maintained that Maersk Line was not looking to merge or make a significant acquisition anytime soon. 

"This year, demand growth is extremely weak, around 1.5 percent to 2 percent, much less than anticipated, while capacity will grow around 7 percent."

Meanwhile, rates have reportedly fallen so low that fuel costs are barely covered, and are purportedly hovering around $300 per container on the Europe-East Asia route, even as carriers say the long-term breakeven rate is $1300 per container. 

"Global [economic] growth is very disappointing, and if we knew what we know today, maybe some of the [investment] decisions we did three years ago we wouldn't have done or they would have been different," Skou said.

He also added that the current environment in the containership space meant that the steady growth in ship size seen over the past few years would likely see an end for now. 

"Unless we start to see massive [economic] growth, it is going to be at least 10 years before bigger ships are seriously considered," he said. 

Ship & Bunker reported earlier this year that Maersk Line had made an order for eleven 19,630 TEU capacity container ships at a cost of $1.8 billion.

Ship & Bunker News Team
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