World News
Maersk Line to Cut 4,000 Jobs, Reduce Network Capacity, Pass on 19,000 TEU Mega-Ship Options
Maersk Line Wednesday announced it is "accelerating efficiency initiatives" due to the bleak market outlook for the box shipping sector over both the short and long term.
The carrier plans to cut at least 4,000 jobs, reduce network capacity, and delay investment in new capacity in order to grow at least in line with the market and defend its market share.
"We are on a journey to transform Maersk Line. We will make the organisation leaner and simpler. We want to improve our customer experience digitally and at the same time work as efficiently as possible," says Maersk Line CEO Søren Skou.
In terms of investment in additional capacity, Maersk Line says it does not plan to exercise options for six super-sized 19,630 TEU Triple-E class vessels, or two 3,600 TEU feeders, while the decision on an optional eight 14,000 TEU vessels will be taken at a later date.
Network capacity reductions will begin in Q4 2015 and continue throughout 2016, says Maersk Line, who plans to cancel a total of 35 sailings in Q4 in addition to the closure of four services that have already been initiated over the last two months.
Finally, Maersk Line says it will reduce its global organisation by "at least 4,000 positions" by the end of 2017, from a current 23,000 land based staff.
"These decisions are not taken lightly, but they are necessary steps to transform our industry," said Søren Skou.
Earlier this week Drewry warned that box shippers were in an "over-capacity crisis which will worsen next year," with low bunker prices the only thing preventing huge losses across the sector.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 596.50 | 0.50 | 688.00 | 1.00 |
| Rotterdam | 523.00 | 2.50 | 677.00 | 1.00 |
| Houston | 550.50 | 0.00 | 676.50 | 8.00 |
| Fujairah | 582.00 | 2.50 | 758.50 | 5.50 |
| Global 20 Ports Average | 599.50 | 0.50 | 757.50 | 2.00 |
| Global 4 Ports Average | 563.00 | 1.50 | 700.00 | 4.00 |
| Global Average Bunker Price | 644.50 | 1.50 | 813.50 | 0.50 |
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