Maersk confident giant ships won’t ruin market

Thursday, 6 October 2011 00:28 - - {{hitsCtrl.values.hits}}

Maersk says 18,000 TEU ships won’t spoil market
Says only few rivals likely to order similar ships
Says focus on fuel changing the industry

COPENHAGEN (Reuters): The world’s biggest container shipping company, Maersk Line, is confident its order for 20 giant new vessels will not spoil the market and only a few rivals will order such ships, a senior Maersk executive said.

Maersk Line, a unit of Danish shipping and oil group A.P. Moller-Maersk, has ordered 20 of the new Triple-E class vessels from South Korea’s Daewoo Shipbuilding & Marine Engineering Co Ltd .

The first of the vessels with capacity for 18,000 20-foot equivalent unit (TEU) containers are due to be delivered in July 2013 and the last in mid-2015, and some analysts warn the capacity expansion could flood the market.

The ships will serve on Asia-Europe routes.

Soren Andersen, Maersk Line’s head of Maersk Line’s vessel management team, told the Informa Maritime Events conference he did not expect the Triple-E class to become a new industry standard like the 13,000 TEU New Panamax class.

“Generally, it will be only very few companies who will go for these ships,” Andersen said. “I don’t see a new industry standard emerging.” Andersen said this was because “money was harder to come by” now than before and few rivals had the financial muscle that Maersk Line has to place such big orders. “We have the market share size that justifies these ships ... We have the financial strength to do this,” he said.

Maersk Line has a global market share of 15.7 percent, according to shipping information provider Alphaliners.

Andersen said Maersk Line’s order for the 18,000 TEU ships did not amount to “aggressive expansion”, which he said some had blamed it for, as it did not exceed expectations for market growth.

“We believe we are below the average of our competitors in (fleet) growth over the next three years and below the market growth,” Andersen said. “I cannot make the figures show that we are making an aggressive market expansion ... We have tried to be conservative, and that is what is needed.”

Andersen said fleet expansion like that seen in the decade from 2000-2010 was not sustainable.

The new ships measuring 400 metres (1,312 feet) long and 59 metres wide and costing about $190 million each will be the world’s biggest. But Maersk says they will consume less fuel and have lower emissions than vessels now in service.

“Fuel is so much more important than five years ago,” Andersen said. “It is changing the whole industry, as we can see with slow steaming,” or running at lower speeds to save fuel.

“These ships are designed for slow speeds (of 17-22 knots),” Andersen said. “We are not adding horsepower.”

Nearly 20 port terminals are ready to receive the new Triple-E ships and that number will increase, Andersen said.