Maersk Line CEO: Rate Hike Key for Company

Monday December 10, 2012

Maersk Line CEO Søren Skou says negotiations with customers this month will determine how well the struggling container shipping business does in 2013, produce industry news site reports.

"We need prices restructured to a level where we don't have to go back to our shareholders and the bank for constant support," he said.

"We are not planning to build any containers next year any more; our most immediate plan is to get the business into shape for investment."

Skou became CEO of the container line in January 2012 and said that since then he has set up a new management team "all the way up to senior level" as well as cut its headquarters staff by around 50 percent.

Maersk Line, the largest division of A.P. Moller-Maersk (Maersk), has also implemented rate hikes to restore profitability, particularly on Asia-Europe routes.

"You have to bear in mind that this is a business with more than $20 billion of invested capital," Skou said.

"We should be making $2 billion a year, and this won't happen anytime soon.

"We expect improvements, but it is one step at a time at the moment."

Maersk has also announced plans to reduce its focus on the shipping division and put more capital into its oil and drilling businesses, but corporate CEO Nils Andersen has said shipping will remain an important part of the business.