Maersk Line in talks to delay newbuildings

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Tony Gray - Tuesday 10 March 2009

 

The Elly Maersk. pic: Maersk Line

MAERSK Line, the world’s largest containership operator, has confirmed it is in talks with shipyards about delaying the delivery of newbuildings into a market which is already heavily oversupplied. 
The Danish container line also said it was in discussions with the owners and operators of chartered-in tonnage with a view to seeking “solutions” which would help it operate more efficiently. 
Chief operating officer Morten Engelstoft told Lloyd’s List: “I can certainly confirm negotiations are under way in an attempt to delay the delivery of newbuildings on order.” 
However, he declined to specify whether the discussions with shipbuilders also embraced the possible cancellation of orders. “In our dialogue with shipyards, our focus is to attempt to delay newbuildings,” he said. 
Although Mr Engelstoft declined to go into more detail, he pointed out that the majority of ships Maersk Line had on order were due for delivery in 2011 and 2012. The company is expecting to take delivery of nine containerships with a combined capacity of 33,200 teu this year, six more in 2010, and a further 32 containerships in 2011-2012. 
Mr Engelstoft also said the combination of “low box rates and relatively high operating costs” was encouraging Maersk Line to go to greater lengths to save costs, including on tonnage that was time-chartered in. 
“We are in contact with all suppliers about solutions that could enable us to operate more efficiently,” he said. “Any innovative ideas that suppliers can come up with to help save costs is welcome.” 
Mr Engelstoft added that in times of crisis, a “closer partnership” with suppliers, including those who provided chartered-in tonnage, gained importance. 
Maersk Line, part of the giant shipping and energy group AP Moller-Maersk, is not unusual In seeking to delay newbuildings and renegotiate charter arrangements; these are developments that have become an industry-wide phenomenon. 
However, as market leader by a substantial margin, its moves are monitored more closely than most in the containership business. 
Earlier this week, Maersk Line said as many as 25 containerships could be taken out of service as it grapples with a collapse in demand at a time of fast-rising capacity and impoverished freight rates. 
However, Moller-Maersk group chief executive Nils Andersen and Maersk Line chief executive Eivind Kolding have made it clear the container line is not prepared to concede market share. 
Moreover, Mr Kolding has indicated that Maersk Line is ready to expand market share should any of its competitors falter. But Mr Engelstoft said that corporate acquisitions were not on the agenda. 
“Right now, we are 100% focused on running the existing business in the best possible way to achieve the best possible results,” he said.