Asia: Maersk Line sees consolidation

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Tuesday, 28 April 2009

A senior executive for the world's largest box liner has forecast consolidation in the industry on the back the current recession, but only after the economy starts recovering. “There will be absolutely no consolidation right now. We are currently focusing on quality for our customers while cutting costs and keeping to basic business parameters,” said Jesper Praestensgaard, Asia Pacific CEO for Maersk Line. Speaking at a conference session at Sea Asia 2009 in Singapore, Praestensgaard said the industry at large, including Maersk, was at present “trying to make ends meet”. But said the basic characteristics for the box liner trades called for consolidation, something which he expected to take place as the recession faded away. He said box shipping was capital intensive with very high fixed costs and low margins. “That makes a perfect recipe for intense competition, and the industry needs alliances to capitalize on economies of scale.” he added. This consolidation of box liners may not be too far off, judging by comments made at the same conference session by Kuah Boon Wee, Southeast Asia CEO for PSA International. “I'm quietly confident that physical trade in terms of containers has actually bottomed...and the trend moving ahead is likely to be positive,” he said. Source: Portworld