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Biggies to Rule Ocean, says Maersk CEO

Maritime Activity Reports, Inc.

June 6, 2015

 The WSJ reports that the Danish container-shipping group is ordering more megaships even as freight rates remain low. Reason?

The world’s biggest container-shipping companies are set to dominate seaborne trade over the next few years, leaving little space for small and midsize operators to compete.
This opinion was expressed by A.P. Møller-Mærsk A/S Chief Executive Nils Andersen.
Maersk Line, a unit of the Danish shipping and oil giant, is the world’s largest container operator, controlling 15.3% of all capacity, according to shipping data provider Alphaliner.
Maersk has placed $1.8 billion order this week for 11 new megaships that will be able to carry 19,630 containers each and will be deployed in the Asia-to-Europe trade loop.
Clearly, Maersk Line is seeking to maintain its position as the world’s largest container shipping company by placing an order for 11 new vessels, as rivals struggle with losses in an industry racked by overcapacity.
“I can’t speak for other companies, but small and midsize carriers-controlling a 3% to 5% market share--with very few exceptions--have been unprofitable for the last seven years,” Mr. Andersen told The Wall Street Journal.
According to observers, the world’s biggest container-shipping operators are making an expensive bet by committing billions of dollars in giant vessel orders. 
Container shipping is a $6 trillion industry that moves more than 95% of the world’s manufactured goods. It is controlled by about 15 European and Asian operators that have pooled their operations through alliances, sharing networks and port calls and using ultra-large container ships that redraw the scale of international shipping. 

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