Maersk Line will not allow its renewed focus on profitability rather than cargo volume to eat into the significant gains in market share it achieved in 2011, the carrier said on Monday.
Maersk’s global market share grew to 15.5 percent in 2011 after it boosted traffic by 11 percent, and hit an all-time high of 19.4 percent on the Asia-Europe trade, “even better than in 2006, a year after Maersk acquired P&O Nedlloyd,” CEO Soren Skou told reporters in London.
The higher market share is key to the success of the Danish carrier’s premium Daily Maersk service from Asia to Europe “where we need to fill 70 ships of a certain size,” Skou said.
Maersk, which lost $602 million in 2011 and expects to lose money again in 2012, now will focus on boosting profitability by raising freight rates in the coming months from unsustainably low levels, particularly on the Asia-Europe route.
A general rate increase of $775 per 20-foot container on the westbound Asia-Europe route on March 1 is “holding up quite nicely … but not getting us into profit,” Skou said. He said it too early to predict the success of a second, $400 hike, planned for April 1 but “we expect that the market will have opportunities to increase rates.”
If market growth comes in slower than forecast, Maersk, which announced a 9.5 percent reduction in capacity on the Asia-Europe trade in February, could take out another 9 percent globally by expanding its slow-steaming program for vessels and by not renewing time-charters when they expire, Skou said. Charters account for some 50 percent of the Maersk fleet.
“We are very keen to get prices up and we will push for that,” he said. “But at the end of the day we want to hold onto our market share at all cost. We will do what it takes. We are cost-effective, so we can defend market share.”
Maersk won’t chase further market share but will grow in line with the market, which it expects to increase 3 percent this year.
Contact Bruce Barnard at firstname.lastname@example.org.