Maersk results reveal market rates have fallen further than shipping demand

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

31 Aug 2009

Maersk Line has suffered a 30 per cent decrease in ocean freight rates, while volumes have only fallen by 7 per cent year on year in the first half-an indication that freight rates have fallen further than necessary this year. Despite scores of rate increase announcements in the first quarter, rates continued to tumble in May and June, AP Moller Maersk chief executive Nils Andersen said at the group's recent first half results' announcement.
But according to the CEO, rates did begin to pick up in late July and early August, which should mean the worst is finally behind us
In contrast to the company's ailing container shipping business, the parent company still managed to eke out some profits in its other business segments in the first half.
Mr Andersen, who said he was "pleased" with the overall group performance, admitted that the container segment had been hit hard, and that it would continue to be in a tough position for some time to come.
"We do expect that the supply and demand balance will be difficult going forward. We are seeing the rate increases that we put in the market sticking, but it's not bringing the container industry as a whole anywhere near an acceptable return," he said.
The liner division saw a reported DKK5.3 billion (US$961 million) loss in the first half after recording a profit of DKK1.3 billion in the first half of last year. This, the CEO said, was largely attributable to the global downturn.
On individual trades, the Danish-based shipping line saw volumes fall on the Asia-Europe trade by 6 per cent, but increased 17 per cent on the backhaul route from Europe. Rates slipped by an average of 46 per cent for the half.

Source: HKDC