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Maersk Consolidates in South America to Cut Costs

Maritime Activity Reports, Inc.

February 17, 2016

Maersk Line, the world's largest container ship operator, said on Wednesday it was consolidating operations in Brazil, Paraguay, Argentina and Uruguay to cut costs amid falling freight rates.

Maersk Line, part of Denmark's Maersk Group, said shipping volumes should not be affected by its decision to put operations in four different countries under one director.

"We will maintain capacity and offer a more consistent frequency," Antonio Dominguez, the new director of operations for the east coast of South America, told Reuters.

Maersk Line expects demand for container shipping to remain weak in 2016, with growth of 1 percent to 3 percent, due to ample offer. Latin America accounted for around 12 percent of Maersk Line's global volumes in 2015.

The company transports around a quarter of the frozen protein shipments from Brazil, the world's top exporter of chicken and beef, and added some 30,000 new refrigerated containers to the global market in 2015.

Maersk believes port terminal auctions now underway are crucial for Brazil to reach its full export potential and would like to see more, said João Momesso, head of trade and marketing for east South America.

"We see great opportunities in the northern and northeastern ports," he said.

(Reporting by Gustavo Bonato and Roberto Samora; Writing by Caroline Stauffer; Editing by Chizu Nomiyama and Tom Brown)


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