Maersk wants more market share on imports to China


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17 Nov 2010

maersk_line.jpgMaersk Line, the world's largest container carrier, wants a larger share of shipments generated from imports to China as the country's economic growth pattern translates to stronger domestic demand.

"We will put more sales and customer service staff in the import
market," Tim Smith, chief executive officer for the Copenhagen-based
shipping line's North Asia region, said in an exclusive interview in

"This is very much linked to the intra-Asia market because a lot of
China's imports come from different parts of Asia. China imports raw
materials or partly processed goods, assembles them and sends them for
export. So we are trying to combine the intra-Asia imports with

The transported volume related to China increased by more than 10
percent, 3 percentage points higher than the global gain, contributing
25 percent of the company's global volume and 35 percent of its total
export volume.

"We've seen a development in the import market in China that will help
the overall demand. We are looking at that very closely," he said.

In the first nine months this year, Maersk Line witnessed a dramatic
upturn from its 2009 historic loss of $2.1 million to a profit of nearly
$2.3 million, thanks to a 34 percent year-on-year increase in average
freight rates, 7 percent increase in transported volume and substantial
savings per unit.

Smith, a 25-year veteran of the shipping industry, describes the
business situation in 2010 as "strange" following unpredictable growth
patterns quarter-on-quarter.

The second quarter this year saw strong growth followed by unexpected
average growth in the third quarter, and a slight decrease in the fourth
quarter, which is unusual due to the annual expected year-end seasonal

"We've been surprised how quickly it has improved. The situation in 2010
is a little bit better than the normal level. 2011 is not necessarily
as good as this year as demand may slow, and we have to carefully
monitor the demand and supply situation," he said.

Although the recovery of mature markets such as Europe and US is still
not strong enough, robust economic growth in emerging markets will spur
further grounds for optimism, said Smith, estimating a global demand
growth of 8 percent next year compared to 2010.

"It won't necessarily be a consistent growth month-by-month, but may go up and down a little bit," he said.

Volume on transatlantic routes increased by 3 percent year-on-year in
the first nine months this year, while volumes rose by 7 percent on
transpacific routes and 16 percent on Latin America and Oceania routes.

He expected a continuous rise of freight demand in Asia, Latin America
and Africa for next year. For the increasing container freight capacity,
which would affect freight rates, he predicted a 10 to 12 percent
year-on-year capacity growth as more new ships are delivered to owners
in 2011.

He said it is difficult to predict how much freight rates will increase
in the future but based on current levels, the company expects to see
good profit ahead.

Revenue of its parent, A.P. Moller, Maersk Group, increased by 17
percent year-on-year to $41.4 billion in the first nine months of 2010,
primarily as a result of higher freight rates for its container shipping
activities and higher oil prices, the group said in an interim report
released on Nov 10.

For the same period, the group reported a net profit of $4.2 billion against a historic loss of $1 billion in 2009.

The group lifted its expectation for a full-year profit from $4 billion
to $5 billion despite cautioning seasonal decline in both volumes and
freight rates for the container activities towards the end of the year.

Source: China Daily


Maersk Line is one of the leading liner shipping companies in the world, serving customers all over the globe.

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