A 'dead cat bounce', as freight goes from rules-based to deals-based trade?
It’s not artificial intelligence we should be worrying about right now: it’s an artificial freight ...
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By Mike Wackett
Alphaliner’s analysis of the financial results of 17 main ocean carriers for the first six months of the year gives a generally improving outlook for the industry, although the turnaround in operating earnings was mainly driven by better-than-expected volume growth in the second quarter.
Of the ...
Comment on this article
Andy Lane
September 05, 2014 at 5:38 amThe reasons for the differences in profitability run a little deeper than merely the size of some new ships. As an interesting fact: COSCO, Hapag-Loyd, CSCL (just) and APL actually boast an average ship size (Total TEU capacity/operated ships) higher than APM-Maersk.
The primary factors behind Maersk’s industry-leading profits will then be; Optimised Network (how you deploy assets), Utilisation (fill them), Yield Management (with the best cargo), Elimination of Operational waste (operational excellence), Procurement (total cost of ownership), and so on. The level of detail in the financial reports does not however allow us to objectively determine how much is gained through each of these attributes. What we might however conclude is that service reliability is not necessarily a cost item, as Maersk leads that league table also.
It is really in these areas where the loss-making Lines need to focus, they do not per se need to rush out and build huge quantities of new mega-vessels, that would merely prolong the pain. You cannot buy your way to profitability, but should embark on a journey of continuously improving processes.