Maersk battles to stay on top as container shipping downturn deepens

Tue Jun 21, 2016 12:57pm EDT
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By Jonathan Saul

LONDON (Reuters) - Denmark's Maersk Line is fighting to remain the world's no.1 container shipping carrier as a wave of mergers and acquisitions, particularly in Asia, creates new challengers trying to grab a bigger share of a depressed market.

Maersk itself hasn't made a major acquisition for more than a decade but says it might be open to "the right opportunity", although doubters believe such deals risk accumulating ships without securing enough customers.

A unit of oil and shipping group A.P. Moller-Maersk (MAERSKb.CO: Quote), the line has a 15 percent share of the overall container market. However, it faces Chinese rivals with global ambitions as well as more traditional Western competitors which are buying up assets in Asia.

The battle is over the world container trade, and especially between Asian ports - one of the few relatively bright spots for an industry suffering its worst downturn since its origins in the 1950s and 1960s.

"It's really tough and everybody in the industry is really suffering, and so have we," Jakob Stausholm, a member of Maersk Line's management board, told Reuters.

"We are defending our leadership position. If we are strong, there is no reason for us not to grow," said Stausholm, who is the line's chief strategy and transformation officer.

The container industry, which ships largely consumer goods ranging from iPhones to designer dresses, has been forced to cut costs and try to build scale due to a weak global economy and overcapacity.

"World GDP growth is struggling ... Combined with trade growth slowing down, this is a recipe for a very bad market," said Evangelos Chatzis, chief financial officer with independent Greek container group Danaos DAC.N.   Continued...

Container ship MV Maersk Mc-Kinney Moller is led by pilot ships as it makes its maiden port of call at a PSA International port terminal in Singapore September 27, 2013.   REUTERS/Edgar Su/File Photo