Maersk Line plans to set aside close to USD 3 billion a year for the period 2015-2019 to finance shipbuilding projects, in an effort to further solidify its position of the shipping company with the largest operating fleet, Reuters reports.
“The current orderbook (is) not sufficient to grow with the market,” was stated during a presentation for Maersk Line’s analysts held in Copenhagen.
“Vessels will support a low cost position by being the largest possible in each trade.”
It was not said how many ships will be added to the existing 500 strong fleet.
The presentation can be interpreted as a strong signal to the shipping industry, as well as Alphaliner consultants, who earlier this month predicted that the Swiss MSC is in a good position to take the number one spot by 2016, based on the current orderbook.
Maersk Line controls about 15% of global shipping market share, with a 20% share in transported cargo on the most frequent Asia-Europe route.
The industry has been battling overcapacity since the financial crisis because new vessels ordered before the downturn have flooded the market. This has driven rates on the main route between Asia and northern Europe to loss-making levels.
Four out of fifteen biggest shipping companies, including Maersk Line, scrambled to profit in the first six months of 2014, which is mainly attributed to the overcapacity caused by the financial crisis. The new ships ordered prior to the crisis overcrowded the market, sending the freight rates to loss-making levels.
Maersk to Spend $3bln Annually on Newbuilds
Posted by Joseph Keefe
Wednesday, September 24, 2014, 8:41 AM
File photo: Maersk Containership underway.
Denmark's Maersk Line will spend around $3 billion a year from 2015-19 on new ships to butress its position as the world's biggest container shipping company, it said on Wednesday.
"The current orderbook (is) not sufficient to grow with the market," Maersk Line, the world's largest shipping company by number of vessels, said in a presentation for analysts at the company's headquarters in Copenhagen.
"Vessels will support a low cost position by being the largest possible in each trade," it said in the presentation.
It was not immediately clear how many ships the company would order. It currently has 500 in its fleet.
Consulting group Alphaliner predicted this month that world No. 2 Switzerland-based MSC Mediterranean Shipping Company could overtake Maersk Line by 2016 based on the industry's current orderbook.
Maersk Line, a unit in the Danish conglomerate A.P. Moller-Maersk, controls around 20 percent of transported goods on the world's busiest route between Asia and Europe. Globally, its market share is around 15 percent.
The industry has been battling overcapacity since the financial crisis because new vessels ordered before the downturn have flooded the market. This has driven rates on the main route between Asia and northern Europe to loss-making levels.
Of the 15 biggest container shipping companies in the world, only four managed to make a profit in the first half of 2014. Maersk Line, the most profitable, reported an earnings gap of five percentage point above peers for seven consecutive quarters.
"The current orderbook (is) not sufficient to grow with the market," Maersk Line, the world's largest shipping company by number of vessels, said in a presentation for analysts at the company's headquarters in Copenhagen.
"Vessels will support a low cost position by being the largest possible in each trade," it said in the presentation.
It was not immediately clear how many ships the company would order. It currently has 500 in its fleet.
Consulting group Alphaliner predicted this month that world No. 2 Switzerland-based MSC Mediterranean Shipping Company could overtake Maersk Line by 2016 based on the industry's current orderbook.
Maersk Line, a unit in the Danish conglomerate A.P. Moller-Maersk, controls around 20 percent of transported goods on the world's busiest route between Asia and Europe. Globally, its market share is around 15 percent.
The industry has been battling overcapacity since the financial crisis because new vessels ordered before the downturn have flooded the market. This has driven rates on the main route between Asia and northern Europe to loss-making levels.
Of the 15 biggest container shipping companies in the world, only four managed to make a profit in the first half of 2014. Maersk Line, the most profitable, reported an earnings gap of five percentage point above peers for seven consecutive quarters.
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