Maersk calls for tie-ups amid slump

Smaller players in the fragmented industry need to be absorbed by bigger players for the industry to become healthy again
The chief executive designate of the largest container shipping line, Maersk Line's Soren Skou, has called for consolidation in the fragmented industry as it struggles to overcome an overcapacity-induced earnings slump.

Smaller players in the fragmented industry need to be absorbed by bigger players for the industry to become healthy again
The chief executive designate of the largest container shipping line, Maersk Line's Soren Skou, has called for consolidation in the fragmented industry as it struggles to overcome an overcapacity-induced earnings slump.
Skou, chief executive of the tankers division of Maersk Line's parent, AP Moller-Maersk, was speaking after Monday's announcement that Eivind Kolding, Maersk Line's chief executive since 2006, would step down on January 16.
He is to take over on February 15 as chief executive of Danske Bank, Denmark's largest bank, of which Maersk owns 20 per cent. Skou accepted container shipping faced "a number of issues" mainly related to a wave of ship deliveries that has flooded the market with unneeded capacity.
The fall in rates pushed Maersk Line into a $322 million third-quarter net loss, against a $1 billion net profit in the same period of 2010.
"There's in my view a need for consolidation, a need for probably some of the smaller players to be absorbed by some of the bigger players, for the industry to become healthy again," he said.
But Skou suggested that Maersk Line was unlikely to buy up any rivals. "I think we will continue the strategy that we have, making sure we are cost-competitive and making sure we have a product and service that are unique and differentiate us in the market," Skou said.
Kolding was identified with the introduction last year of Maersk Line's Daily Maersk service, offering daily container ship departures from the most important Asian ports for northern Europe. In February, he announced plans to build 20 of the largest ever container ships for use on Asia-Europe services.
Skou will have to respond to industry upheaval that many attribute partly to Maersk's initiatives.
Switzerland's Mediterranean Shipping Company and France's CMA CGM — operators of the second- and third-largest container ship fleets — on December 1 announced plans to form an alliance on several routes that will give the pair a combined fleet bigger than Maersk's.
Skou played down the importance of being the largest container line. "Where we are exactly — number one or number two — is not really what drives us," he said.