A.P. Moeller-Maersk A/S (MAERSKB), owner of the world’s largest container line, said the shipping industry must learn to live with excess capacity.
Given the current order book for container vessels, achieving equilibrium between supply and demand “is not an immediate thing,” Chief Executive Officer Nils Smedegaard Andersen said in an interview. Industry estimates point to a balance being reached in 2015 or 2016, with Copenhagen-based Maersk on the “slightly more pessimistic side,” he said.
Maersk Line -- which controls almost 16 percent of worldwide container capacity -- and its competitors are battling oversupply after a boom in ship purchases coincided with the financial crisis, triggering the worst slump in carriage fees since containerization became global in the 1970s. The company yesterday posted an 11 percent gain in third-quarter profit after cost cuts helped counter a decline in rates.
“The industry will live with overcapacity for a long, long time,” Andersen said. “We have, in terms of our own situation, come to accept that we have to make money, irrespective.”
As of Sept. 30 the global container fleet stood at almost 17.2 million standard containers, or TEUs, an increase of 6 percent versus a year earlier, according to Maersk. Some 56 vessels were added in the third quarter, 41 were scrapped and 91 new ships were ordered, while 2.6 percent of the total fleet stood idle, down from 3.4 percent a year earlier, it said.
Jumbo VesselsAnd from Gawker (!):
Maersk took delivery of three of the world’s largest Triple-E container ships in the third quarter, with reduced fuel burn and a capacity of 18,000 standard containers, and will receive another two before the end of the year.
In order not to increase overall supply, Maersk offers only 14,000 to 15,000 TEUs of available capacity on the Asia to Europe routes where the craft are deployed, Andersen said.
“Our purpose is not to use the Triple-E vessels to take market share or start price wars or anything like that,” the CEO said. “For us, it’s a matter of reducing our costs. We will keep our market share and, depending on how the market grows, that will mean we will give back more or less tonnage to charter partners or scrap more or less of our own vessels.”...MORE
Whoops, They Didn't Need to Build the World's Biggest Boat After All
...How fucking psyched is the head of Maersk to finally get his hands on this humongo super ship—upon which he has literally bet the entire financial future of his company? Pretty psyched! Well—kind of psyched. Not really psyched. He tells the Wall Street Journal:"It's pretty clear that when we look back to early part of 2011 when these ships were ordered, ours and everybody else's view on growth was somewhat different than what it turned out to be and therefore the market will not be as quite as big in 2015 as we thought it to be," Mr. Skou said.
Now available for parties, bar mitzvahs, and weddings: a big old boat.
