Maersk “Ready to Battle on Prices”

Maersk Line on Aug. 24 warned rival ocean container carriers it is prepared to fight a rate war to defend its market share.

"We won't allow anyone to take our market share by systematically undercutting our prices … we are ready to … battle on prices," said Nils Andersen, chief executive of Maersk's Copenhagen-based parent A.P. Moller-Maersk.

Maersk is the world's biggest ocean carrier with an estimated market share of around 15 percent, ahead of Geneva-based Mediterranean Shipping Co. and France's CMA CGM.

Andersen's warning, in an interview with Danish newspaper Dagbladet Borsen, comes just days after Maersk reported a second quarter loss of $402 million against a year-earlier profit of $198 million. First half losses climbed to $961 million.

Second quarter freight rates were down 34 percent from a year ago, but Maersk forecast modest increases in the current quarter.

Maersk is reported to have cut its rates through the second quarter to protect market share despite a rate restoration program introduced on April 1.

The carrier today unveiled a series of rate increases on its intra-Americas services from Sept. 1, claiming they were necessary "to continue providing a first class service … in an environment where the operating costs remain on the rise and current rates are below sustainable levels."

The largest increases are on routes from North America to/from the West Coast South America -- $300 for a 20-foot equivalent unit and $600 for a 40-foot equivalent unit effective Oct. 1.

There will be smaller rate rises of between $50 and $200 per TEU on routes between Mexico, Central America, the Caribbean and the east and west coasts of South America from Sept. 1.

Contact Bruce Barnard at brucebarnard47@hotmail.com.