Maersk Line may cut key routes to arrest volume decline
Maersk Line is preparing to eliminate or cut back several service loops in response to mixed first quarter results, says chief financial officer Jakob Stausholm.
Speaking to ShippingWatch, Stausholm said that “one of the tools” available to Maersk was to “withdraw capacity where it's needed”.
His comments come just days after the shipping giant’s first quarter results showed record profits for any three month period in years.
In the first quarter of 2014 the line made US $714 million compared to US $454 million the year before.
However, this performance was largely a result of the fall in the oil price, which cut Maersk’s operational costs significantly.
The Q1 report revealed that Maersk has been unable to fill its ships, with much lower than expected demand for containers seen in the three months to March 31st leading to a 1.6% decline in volume.
“"The global economy grew less than we had thought. This has affected the utilization of the vessels and we must react to this,” says Stausholm.
He indicated that services in Asia-Mediterranean and West Africa would likely see a reduction or elimination altogether of some service loops, but for now it seems the Middle East is unaffected.
Maersk is also expecting to see better fleet utilisation as a result of its 2M ship-sharing alliance with MSC, which was announced last year and implemented in April.
Maersk Line expects gains from the alliance of about US $53 million a year and within the next few weeks will announce an order for new, larger container vessels.