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Maersk Gains From US Military shipments

Maritime Activity Reports, Inc.

May 2, 2012

Maersk gains from US military's US$ 11.5 billion war shipments

Maersk, owner of the world’s largest shipping line, has benefited the most from the U.S. military’s dependence on commercial lines, according to a report in 'Longshore & Shipping News'.

The company, based in Copenhagen, received almost half the military’s $1.82 billion in contracts last year to ship supplies and equipment around the globe, most of it tied to Iraq and Afghanistan, according to Defense Department data. Maersk also arranges rail and truck transport as part of the agreements.

While the military accounts for a small share of Maersk’s revenue, the work tends to offer higher margins because of its specialized nature, said Jacob Pedersen, an analyst with Sydbank A/S (SYDB) in Denmark. It also may help offset a commercial shipping slowdown tied to a glut of new vessels, he said.

The report adds that American President Lines Ltd., part of Neptune Orient Lines Ltd. of Singapore, received $421 million in defense contracts in fiscal 2011.

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