Maersk sees 'significant' rate hike November 1, major layups to follow

Time:2012-09-03 Browse:53 Author:RISINGSUN
MAERSK Line CEO Soren Skou told a Hong Kong press conference that "significant" rate increases are coming on November 1 to sustain profitability after a prolonged slump in global shipping.


Mr Skou also spoke of "significant" capacity cuts before the end of the year as the slack season took hold in winter months, adding that the shipping line had already taken 10 per cent out of the market.


"As we will be taking capacity out, we expect reasonable success" that the latest rate increases will be effective, said Mr Skou, adding that Maersk had come to a capacity withdrawal arrangement with French shipping giant CMA CGM.

 
Mr Skou said the aim of the company was to retain its present 15 per cent market share of the global container shipping industry. "Raising prices always comes at the risk of losing market share, but we have managed to retain the same level as we had in 2011 - 15 per cent," he said.
 

"We need the rate increases to reach a level of profitability. And we aren`t there yet. We have to manage capacity so we don`t offer capacity to the market we cannot sell at a reasonable price," Mr Skou said.

 
Unimpressed, Sunny Ho, executive director of the Hong Kong Shippers Council, declared: "A general rate increase in November?! He must have lost his mind! The market is weak and November is the trough."

 
But other carriers, OOCL and Cosco, have either confirmed plans to raise rates or are likely to follow Maersk. There have been a half dozen rate increases since January.

 
Mr Skou said shippers appeared to be positioning for satisfactory holiday spending in the US, but not in Europe "The customers are expecting a Christmas season, which doesn`t appear to be the case in Europe," he said.