Maersk to Face Price War
A.P. Moller-Maersk's main sea freight business faces the threat of a new price war in a consolidating industry, though the company has been fortified by the $7.5 billion sale of its oil and gas business to France's Total Reuters reported.
Maersk, the world's biggest container shipping company, has shifted its focus this year from preserving market share to higher margins, a strategy that was helped by a recovery in freight rates, MANA correspondent reported.
Reuters quoted Chief Executive Soren Skou saying that the company's second quarter results last week "were driven by higher freight rates alone" and that underlying industry fundamentals were their best since 2010.
But competitors including Ocean Alliance -- a newly-created partnership between France's CMA CGM, China's Cosco, Hong Kong's OOCL and Taiwan's Evergreen -- will this year launch a string of ultra-large vessels and will have little choice but to chase a bigger slice of the market.
Maersk's focus on margins comes after splashing out $4 billion in December to buy smaller German rival Hamburg Sud, strengthening its presence in global trade and Latin America and increasing global market share to 18.6 percent from 15.7 percent.