Indian coastal freight attracts major carriers, but regional tension disrupts
India’s growing coastal freight demand looks like the next target for foreign container lines amid ...
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By Mike Wackett
Maersk Line’s aggressive growth strategy in the first three months of this year was a contributing factor in the 23% drop in average freight rates during the period.
According to the most recent research from Alphaliner: “Maersk’s decision to pursue market share contributed to the decline in freight rates of early 2016.”
It added: “In the year’s first quarter, when most competitors were trying to curb capacity growth, Maersk deployed off-schedule extra loaders on both Asia-Europe and transpacific routes.”
Based on Alphaliner’s table ...
Comment on this article
Martyn Benson
May 25, 2016 at 3:23 pmSo, first design, build and then launch a fleet of over-sized ships on the market, to which the competition is forced to react by also building similar ships. Then Maersk sees its market share fall and reacts by marketing more aggressively, thereby dropping the rates even further.
Then the Maersk management bleat about how the world is so cruel and that the only thing that will help them is more M&A activity (which is also wrong).
Is it not clear to everyone that Maersk created the space race to knock out the weakest competitors (HMM, HJS, etc) and to dissuade any new entrants or those who don’t have the stomach for a fight any more (NOL/APL)?
It is clear that Maersk are playing a long game and don’t really care about the damage they have caused, because they know they will still be around at the end and can then profit from the thinned out field of competitors.
Tim Routh
May 25, 2016 at 11:44 pmStandard and Poors recent downgrade of Maersk to a BBB+ rating was on the assumption that the average rate was $2000 per FEU. Given the rates above and the tactics the CEO has outlined are we expecting a further downgrade in rating this year?
If so the next downgrade would really effect their business this time around.
Would be very interesting to see how the banks and stakeholders react. Perhaps for the first time in many an era Maersk would actually be burdened with the same issues of the shipping lines.
But hey their share price is still above USD$1400 per share. Apple inc is USD$94.