Maersk Line to Spend USD 3 Bn a Year on Newbuildings

Maersk Line to Spend USD 3 billion a Year on Newbuildings

Maersk Line plans to set aside close to USD 3 billion a year for the period 2015-2019 to finance shipbuilding projects, in an effort to further solidify its position of the shipping company with the largest operating fleet, Reuters reports.

“The current orderbook (is) not sufficient to grow with the market,” was stated during a presentation for Maersk Line’s analysts held in Copenhagen.

“Vessels will support a low cost position by being the largest possible in each trade.” 

It was not said how many ships will be added to the existing 500 strong fleet.

The presentation can be interpreted as a strong signal to the shipping industry, as well as Alphaliner consultants, who earlier this month predicted that the Swiss MSC is in a good position to take the number one spot by 2016, based on the current orderbook.

Maersk Line controls about 15% of global shipping market share, with a 20% share in transported cargo on the most frequent Asia-Europe route.

The industry has been battling overcapacity since the financial crisis because new vessels ordered before the downturn have flooded the market. This has driven rates on the main route between Asia and northern Europe to loss-making levels.

Four out of fifteen biggest shipping companies, including Maersk Line, scrambled to profit in the first six months of 2014, which is mainly attributed to the overcapacity caused by the financial crisis. The new ships ordered prior to the crisis overcrowded the market, sending the freight rates to loss-making levels.

World Maritime News Staff, September 24, 2014