Container shipping under critical observation - Maersk striking out to new shores
The A.P. Moller-Maersk group’s container subsidiary Maersk Line, the largest container shipping line in the world, is set to invest more in stable business opportunities, that is to say in oil and gas production and ports, and less in the container shipping industry.
Falling volumes and overcapacities in the global container shipping industry have prompted Maersk to re-think its strategy. A.P. Moller-Maersk Group CEO Nils S. Andersen told the Financial Times and the television channel CNN that once the shift is completed, probably more than 50% of the company’s capital will be in the oil, drilling rigs and port divisions. Liner shipping activities will account for up to 30%, and the shipping business will still receive investments of USD 6 to 8 billion in the next 5-year period.
Maersk Line, Moller-Maersk’s container shipping division, can be considered something of a barometer for the industry, as it can operate relatively independently, on account of the extensive diversification of its activities. Andersen pointed out that though his corporation believes that its oil, drilling rigs and port divisions are substantially more stable and lucrative at the moment, the corporation’s shipping activities will not be neglected. «We’re not going to give up our position as the leading shipping company in the world,» Andersen said (it has a 16% market share), adding that Maersk has «substantial outstanding newbuilding orders [around 450,000 teu, according to Alphaliner’s statistics], so we’ll easily be able to grow with the market.»
The group’s reaction to the latest developments is understandable. Even if Maersk Line expects to make «a modest profit» in the current year, it reported net losses amounting to USD 540 million on its shipping activities in 2011, whilst its oil and gas division made a USD 2.6 billion profit, and its port activities a USD 650 million profit. Analysts believe that the current volatile state of the shipping industry will continue for at least another three years.