Maersk Line Depends on "Natural Hedge" on Fuel Costs

by Ship & Bunker News Team
Monday April 7, 2014

With fuel volatility a fact of life, Maersk Line depends on the diversification of parent company A.P. Moeller-Maersk (Maersk) to cushion it from jumps in prices, CEO Søren Skou told Indian newspaper Business Today.

"We have a natural hedge in the sense that we have an oil company so when fuel prices are going up it is costing Maersk Line money but then all businesses are benefitting and vice versa," he said.

"There is not much one can do to manage fuel price volatility except reduce consumption as much as we can."

Skou said that, while there are "many issues to deal with" in the current shipping market, the company considered its $1.5 billion profit last year a "very satisfactory result," and it expects a similar result this year.

"We also have a strategy on every year becoming more cost effective," he said.

Skou said saving fuel is a key part of Maersk Line's cost-containment strategy since bunker accounts for about 20 percent of its total costing, leading the company to invest $30 million in fuel-efficiency technology.

Maersk Line reported last year that fuel-efficiency improvements made since 2007 made the difference between a profit and loss for 2012 by pushing fuel costs $1.6 billion lower than they would have been without the changes.

Ship & Bunker News Team
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