Peter T. Leach, Senior Editor | Oct 06, 2011 12:10PM EDT
Maersk Line on Thursday denied reports that it is using its market size and economies of scale to drive weaker carriers out of the Asia-Europe trade and gain market share.
“The current volatility and uncertainty we witness in many markets … has triggered large rate instability, which is not supported by current fundamentals, but by an expectation that supply/demand may worsen significantly in the near future. Maersk Line has had to react to these changes and protect its position in the market.” said Vincent Clerc, vice president of Maersk’s Asia-Europe service told The Journal of Commerce in an emailed statement.
“We are not however in the business of waging a price war, but in the business of solving problems for our customer and offering sustainable transportation solutions to them. Our products and cost base are very competitive and allow us to weather this volatility and remain true to our commitment to our customers. We will keep protecting this,” Clerc wrote
The Danish carrier’s statement came in response to market reports that its order for 20 Triple-E megaships of 18,000 20-foot equivalent units and its “Daily Maersk” service on the Asia-Europe trade are aimed at dominating that trade.
“Maersk is tightening the screws and putting particular pressure on smaller companies with weak balance sheets,” Dan Togo, a shipping analyst for Sweden’s’ Handelsbank told Jyllands-Posten, a Copenhagen newspaper this week.
"Maersk sees it as an investment where you have to make do with poor returns in exchange for getting a better balance in the market," Togo said.
Togo said a clear signal of Maersk effort to dominate the Asia-Europe trade is that it has not taken a single ship out of service in the last two years despite growing overcapacity, while in 2009 it laid up 25 container ships. “Maersk Line, Mediterranean Shipping Co. and an alliance of four companies, primarily Cosco, are putting on the thumb screws," he said.
This means that smaller carriers are “faced with the choice between two evils: either they can go with the cost now and concentrate on more ships, or get run over,” said Seaintel CEO Lars Jensen. “The risk is that they may collapse in three years because there will be too many ships.”
-- Contact Peter T. Leach at pleach@joc.com. Follow him on Twitter @petertleach.