MAERSK LINE boosts Triple-E fleet with order for 11 even bigger containerships

With the twentieth and final delivery of its Triple-E series of 18,270 teu ultra-large container vessels (ULCVs) due to take place this month, Maersk Line yesterday announced the next phase of its fleet expansion with an order for what will become the largest ships in its fleet.

A public signing ceremony at the DSME shipyard in South Korea yesterday saw Maersk Line chief executive Soren Skou place a new order for 11 Triple-E next generation 19,630 teu vessels for delivery in 2017 and 2018.

The ships represent a capacity increase of 1,360 teu on the original Triple-Es, or 7.4%, while in terms of physical dimensions – with a length of 400 metres, beam of 58.6 metres and a draught of 16.5 metres – they are virtually identical to the first generation, which just goes to show how container vessel design has changed in terms of squeezing out more slots from current dimensions since the Triple-E was first conceived.

MAERSK LINE in the black after four quarterly losses

Rebounding container rates helped Maersk Line post a third quarter operating profit of $547 million compared with a loss of $255 million and made parent A P Moller-Maersk raise the group's full-year outlook.

Group chief executive Nils Smedegaard Andersen cautioned rates could reverse for Maersk Line, which returned to profit after four successive periods of losses, reported Reuters.

"I think one should be careful expecting that this is now very stable," Andersen told reporters. "It does not mean there is no chance of a relapse for prices on some routes."

The container unit, a barometer of world trade as its fleet carries more than 15 percent of all seaborne containers, has struggled with profitability due to the global economic slowdown and an oversupply of vessels. Maersk Line successfully managed to implement rate hikes in the third quarter along with rivals, but spot rates on the crucial Asia to Europe route were easing again this week, worrying some analysts.

"The profits are not sustainable for Maersk Line," said Alm Brand analyst Jesper Christensen. "I believe the unit will hold up in the fourth quarter but that rates will fall to unprofitable levels at the beginning of next year," Christensen said.

The Maersk group said it still expected a modest positive result in 2012 for Maersk Line, based on higher average rates in the second half, but downgraded growth estimates for seaborne container demand to three percent from four percent.

It did not offer outlook for next year, but raised its 2012 group net profit forecast to US$3.7 billion from "slightly above" last year's $3.4 billion result. Group net profit jumped to $933 million in the third quarter from $371 million in the same period last year, lagging an average forecast of $1.20 billion by analysts in a Reuters poll.

Maersk Oil reported a 33 percent fall in operating profit to $1.16 billion, lagging forecasts.

Shipowners are struggling with an oversupply of vessels that could intensify next year. Raising rates and cutting costs are amongst ways the companies can cushion falling volumes as trade slows worldwide.

The group said last month it would step up investment in its oil, ports and drilling businesses to cut its exposure to the volatile container shipping industry.

The shipping downturn has forced banks to pull back from shipping finance amid a four year-long downturn that is likely to extend well into 2013. Maersk could decide to increase its planned bond issue program, Smedegaard said.

"Our bond programme is still of a limited size and what will decide how large it will be is how the banks' behaviour will change in the future," he said. "If the banks view credit for large companies increasingly in terms of bonds, we will definitely increase our bond programme," Smedegaard said. The group's four core businesses are Maersk Oil, APM Terminals, Maersk Drilling and Maersk Line.

MAERSK LINE to restructure, terminate 400 jobs

Danish oil and shipping group A P Moller-Maersk said it would slash about 400 jobs as part of a restructuring of its struggling container shipping division Maersk Line.

The group said in a statement that a key objective of the reorganization was faster decision-making and that about 250 of the job cuts would be at its Copenhagen headquarters, reported Reuters.

The shipping industry has been hit hard during the global economic downturn as weak demand and excess capacity knocked freight rates to loss-making levels.

Maersk said last month it expected 2012 results "slightly lower" than in 2011, a modest improvement on previous guidance, but below analysts' hopes.

Maersk Line reported a loss of US$599 million in the first quarter. In a stark illustration of the damage caused by excess tonnage in a poor rate environment, Maersk Line’s volume increased by 18 percent while the average freight rate declined by nine percent compared to the first quarter last year.

source: cargonewsasia[dot]com / picture: google[dot]com

Maersk posts a quarterly loss of US$599 million despite 18pc volume rise

DENMARK's AP Moller-Maersk Group has posted its first quarter results, which its container shipping unit Maersk Line suffered US$599 million year-on-year loss despite a 18 per cent growth in volumes.

The carrier said the average freight rate fell nine per cent compared to the same period last year.

Overall, the group delivered a profit of $1.2 billion, drawn on revenues of $14.32 billion, down one per cent year on year. Compared to the same quarter of 2011, it experienced almost zero growth in the first quarter. Excluding divestment gains and one-off tax income from the settlement of an Algerian tax dispute, the group recorded zero profit in the first three months, against a profit of $1.1 billion in the same period of 2011.

Group CEO Nils Andersen said the company is "not satisfied" with its first quarter performance, adding "earnings in shipping were weak due to the continued loss-making rates in the container and tanker markets. However, our efforts to increase container rates are paying off and we will continue our initiatives to improve rates throughout the year.

"We will also maintain a high level of costs for oil exploration and development of discoveries for production. We are confident that these investments will enable us to stop the decline in our oil production and then return to growth towards our target of 400,000 barrels per day."

Looking ahead, Maersk expects the group's year-end 2012 earnings will be slightly lower than the $3.4 billion recorded in 2011. Cash flow used for capital expenditure is expected to remain the same as in 2011.

For container shipping, Maersk Line said it "expects a negative up to neutral result in 2012, based on the assumption that the rate restoration that has taken place since March 2012 will continue."

The Maersk Line projects the global demand for seaborne containers will increase by four to six per cent in 2012, with lower increases on the Asia-Europe trades, but higher increases on the north-south trades.

picture: google.com

Maersk Line's new CEO Soren Skou cries 'slow down - we're destroying shareholder value'

THE container shipping business is consistently destroying shareholder worth and wishes to rein back fleet growth to enhance returns, says Maersk Line's new CEO Soren Skou.

Mr Skou, who took over in mid-January, created the comments in London shortly once parent company, AP Moller-Maersk, announced a internet loss of US$537million from its container activities division in 2011, against a $2.64 billion internet profit the previous year.

Nils Andersen, AP Moller-Maersk's chief govt, has accepted that Maersk helped to accelerate last year's industry-wide fall in rates by introducing a daily service from the most Asian ports to the most northern European gateways, reported London's money Times. The Daily Maersk service significantly increased ship capability on key trade route at a time of already weakening demand.

But Mr Skou said Maersk had captured enough market share to fill the additional capability and currently required to enhance profitability.

"We we have a tendency tore notably happy to envision the uptick we have a tendency to had in volume once we launched," he said. "On the degree, we're where we want to be so as to be competitive. currently it's concerning attempting to induce higher paid."

Mr Skou noted that ocean liners had achieved, on average, operating profit margins of simply 2 per cent over the past seven years and solely earned "acceptable" margins of twelve per cent in 2010.

The new chief govt, who was previously CEO of Maersk's tanker division, refused to mention what level of returns the business ought to obtain, however said: "What I will say is that, unless we have a tendency to get business returns up to eight or 9 per cent, we're undoubtedly destroying shareholder worth."

The Danish shipping cluster might do nothing to manage the reaction of the opposite carriers to the speed slump, however would defend its market share if necessary by cutting costs, Mr Skou said.

But the shipping line would aim this year to grow by solely the 3 to four per cent annual rate given the anticipated for demand to ship containers. The carrier has already cut capability on its Asia to Europe services 9 per cent in an endeavor to come back to profitability.

He denied, however, that the shift represented a wholesale modification of strategy. "In the last few years, so as to be ready to provide, among different things, Daily Maersk, we've got been growing considerably faster than the market," Mr Skou said. "The huge modification is basically in our growth aspirations."

picture: google.com

Maersk to cut Asia-Europe capacity by 9%

Maersk Line, the world's biggest container shipping company, will cut nine percent of its vessel capacity in the Asia-Europe trade in a bid to combat low freight rates clipped by oversupply, reported Reuters.

Maersk Line, a unit of Danish shipping and oil group A P Moller-Maersk, said the capacity reduction would be facilitated by a vessel-sharing agreement with French container shipping line CMA CGM.

"Oversupply of container vessels operating on the Asia-Europe trade lane has pushed Maersk Line's container freight rates to unsustainably low levels," the company said.

Analysts said the capacity cut, which was the first major move by Maersk Line's new chief executive Soren Skou, could help the company push through ambitious rate increases in March.

Sydbank senior analyst Jacob Pedersen said it was a significant break with Maersk Line's strategy throughout 2011 when it accepted lower rates in anticipation that rivals would withdraw capacity or go under.

"That has not happened yet to a large extent, but new alliances and therefore fewer players in the Asia-Europe trade nevertheless underpin hope for more balanced competition going forward," Pedersen said.

Pedersen said recently announced rate increases of US$700-$900 per 20-foot container on Asia-Europe routes, together with capacity reductions, could significantly improve the shipping industry's earning potential for 2012.

Maersk Line, which is expected to post losses for 2011 when A Moller-Maersk presents annual results on February 27, threw down a challenge to rivals last year by introducing a more streamlined and frequent service without a surcharge on its key Asia-Europe routes.

That move prompted some other boxship companies, including CMA CGM and Switzerland-based Mediterranean Shipping Co (MSC), to form new alliances to counteract Maersk.

"The reverse side of the coin is that deeply needed consolidation will now be postponed indefinitely to the detriment of the sector's – and Maersk Line's – long-term value creation," Pedersen said.

Maersk referred to an Alphaliner forecast that Europe to Far East container traffic growth would slow to 1.5 percent in 2012 from an estimated 2.8 percent in 2011, due to a weakening economic outlook in Europe. "The industry container vessel fleet, by contrast, is set to grow by 8.3 percent in 2012."

Maersk Line said it would make the adjustment without giving up any market share gained over the past two years. "We will defend our market share position at any cost, while focusing on growing with the market and restoring profitability," Skou said.

Maersk Line said the cooperation with privately owned CMA CGM would help it cut the cost of serving West Mediterranean markets, enable it to deploy its own vessels to areas where they were most needed and pursue further slow-steaming, or sailing at lower-than-normal speeds. Maersk Line said it would also consider additional steps to reduce capacity, including redelivery of time charter tonnage, lay-ups of vessels and slow-steaming.

Maersk reiterated that it would not exercise an option for the last 10 giant Triple-E class vessels out of a total of 30 it had initially contracted last year to Daewoo Shipbuilding & Marine Engineering of Korea.

source:cargonewsasia.com

Maersk Line adds Le Havre, Hamburg, Zeebrugge to Daily Maersk from February

DANISH shipping giant Maersk Line has announced it will add port calls at Le Havre, Hamburg and Zeebrugge in February in its Daily Maersk service to enhance its "conveyor belt" concept on its main Asia-Europe route.

The service requires a 26-day transit from Shanghai to Zeebrugge and Le Havre and 28 days to Hamburg, reports Newark's Journal of Commerce, adding that Maersk has ended its vessel sharing agreement with CMA CGM after the newly announced CMA CGM-MSC alliance.

Said Maersk's vice president of Europe service Vincent Clerc: "The cancellation of the vessel sharing agreement ... offered us another opportunity to look at how we serve customers moving cargo between Asia and north Europe.

"We found that without CMA we could actually offer an enhanced service to more customers in more corridors and maintain our promise on the Daily Maersk corridors. So that is what we did."

CMA CGM chief financial officer Michel Sirat said the key aim of forming an alliance with MSC is to upgrade services so that the two carriers can compete with Maersk.

The 13,092-TEU Maersk Edison will be responsible for the last sailing in the vessel sharing agreement with CMA CGM, with a cut-off in Ningbo, China on February 16.

The world's largest carriers said it will offer a new Asia-Mediterranean service to replace the one partnering with CMA CGM now.

The report said shippers will benefit from shorter transit times and higher reliability. But they cannot receive cash compensation for late guaranteed deliveries available on the Daily Maersk service connecting four Asian ports with Bremerhaven, Rotterdam and Felixstowe.

Daily Maersk currently deploys 70 ships, offering daily Asia-Europe service seven days a week between Ningbo, Shanghai, Shenzhen-Yantian, Tanjung Pelepas and northern Europe.

source: shippinggazette / picture: google.com

MAERSK Signs MOU With INDONESIAN Port Operator

Chief executive officer of the AP Moller Maersk Group, Nils S Andersen, signed a memorandum of understanding with the top Indonesian port operator Pelindo II. The two companies are committed to infrastructure investments in Indonesia.

Addressing R J Lino, president director of Pelindo II at a meeting at the Maersk headquarters in Copenhagen, Denmark, Andersen expressed strong interest in further developing Maersk’s engagement in Indonesia.

“Indonesia is already an important market for Maersk, and we are interested in committing more of our resources to expand our operations in the country,” said Andersen. He expressed the Maersk Group’s desire to develop and expand the infrastructure of Indonesia in cooperation with Pelindo II, facilitating Indonesia’s growing foreign trade.

The memorandum of understanding outlines a plan for training and development of Pelindo II staff as well as providing consultancy support in lifting operational efficiencies in one of the Pelindo II facilities.

Focusing its efforts on new markets outside the OECD countries is part of the Maersk Group’s priorities for 2011, and Indonesia is a country of particular interest to Maersk. As a conglomerate, with container shipping, port activities, oil exploration, oil production activities as well as oil services, there are many opportunities to grow and provide top quality infrastructure and services in Indonesia.

The A.P. Moller - Maersk Group has been present in Indonesia since 1958, operating through shipping lines Maersk Line, Safmarine, MCC Transport and the company’s logistics arm, Damco.

In 2010, the A.P. Moller ‐ Maersk Group had a revenue of US$ 56.1 billion and a profit after tax of US$ 5.0 billion.

picture: google.com / source: logasiamag.com

MAERSK Line orders World's LARGEST and efficient Container SHIPS

Maersk the leading containership carrier has ordered 10 World's largest and efficient Container Ships ever, each of them has the capacity to carry 18,000 Tue (Twenty-Feet Containers), these gigantic containerships are classified as ' Triple-E '.

"Called the ‘Triple-E’ class for the three main purposes behind their creation — Economy of scale, Energy efficient and Environmentally improved — these new container vessels do not just set a new benchmark for size: they will surpass the current industry records for fuel efficiency and CO2 emissions per container moved held by the Emma Mærsk class vessels."

These containerships will be built in Korea by Daewoo Ship Building & Marine Engineering Co., Ltd and are set for the Delivery between 2013 and 2015. The Containerships will be deployed on Asia - Europe trade lanes. So far only Rotterdam, Felixstowe and Bremerhaven have ports deep enough to accommodate the containership of this size. Each of this Triple-E Class vessel will cost US $ 190 Million, which means the total amount of this order would be approx US $ 2 Billion, making it the single largest order ever placed in the Containership Industry.