MAERSK Line, the world's largest
container shipping firm, expects container shipping to grow 7% to 8%
globally this year, with trade within Asia outperforming that, in
spite of soaring fuel costs and a slowing world economy.
Its Asia Pacific chief executive
Jesper Praestensgaard said intra-Asia trade was growing relatively
more than between the regions, so Asia was probably more shielded
from a downturn in the US and Europe.
He added that the firm would
introduce a new China-Singapore service from next week to tap
Maersk Line, part of Danish
shipping and oil group A.P. MollerMaersk, now operates over 500
container vessels and 1.9 million containers.
Since June it has ordered 34 new
ships for delivery by 2012, amid concerns of an impending oversupply
in shipping capacity worldwide.
“Shipping is cyclical, everyone
knows that. So when we make investments in shipping, we invest in
ships with lifespan of 25 to 30 years, and you have to measure
success over that lifespan,” said Praestensgaard.
Soaring bunker fuel prices, now at
over US$750 per tonne, up from about US$500 in January, represents
over 50% of the firm's operating costs, and has had a significant
impact on margins, he said.
Maersk's biggest container ships,
at full capacity, can consume an estimated 46,200 litres of fuel for
every 100 km.
Maersk Line partially offsets its
fuel costs by imposing a bunker adjustment charge on customers, fuel
hedging, and the practice of “slow steaming”, where shippers operate
vessels at slower speeds to cut fuel consumption and make up for it
by increasing the number of ships on a route.
“There is no doubt that the current
oil prices is hindering global trade, both in terms of reducing
consumption and increasing transportation costs in general,” he
On mergers and consolidation,
Praestensgaard said, the potential merger between
Singapore-controlled Neptune Orient Lines (NOL) and HapagLloyd, the
container unit of Germany's TUI AG, could be good for the industry
that was now overly fragmented.
He declined to comment on Maerk's
own interest in the German shipper, but Maersk Line global CEO
Eivind Kolding told a German newspaper last month that he was not
ruling out takeovers and was keeping a close eye on HapagLloyd.
Maersk Line had shocked Singapore
authorities when it decided in 2000 to take a 30% stake in Port of
Tanjung Pelepas (PTP) and shift most of its operations there,
threatening PSA Singapore Terminal dominance in the region.
“The market demand was to be in
Singapore as well, so that's why we're here too,” he said, adding
that more of Maerk Line's operations were still based in PTP
compared to PSA at this point, but declined to give specifics. –