Maersk Line: Skou calls for further consolidation

 

Long Beach: Soren Skou, the ceo of Denmark’s Maersk Line, is adamant that the liner sector needs further consolidation.
 
In an exclusive interview with Maritime CEO, Skou says, “The industry needs to consolidate. The only way is through mergers as no one will be putting huge sums of money to acquire new companies.”
 
Skou is hoping the proposed German merger between Hamburg Sud and Hapag Lloyd “will kick off another round of consolidation”. Still, Skou is reticent as to who else will merge with whom. “As to where and who I don’t know,” he claims.
 
Skou has been in the news a lot in the past couple of weeks attending various press events. His turn in the limelight is richly deserved given how he has turned around the world’s largest container line.
 
Maersk Line made a profit of $461m last year, a huge swing from the $553m loss suffered in 2011.
 
Skou took on the role of ceo in mid-January 2012. That month Maersk Line lost around $250m, a figure that was repeated in February. “It was completely unsustainable,” the Maersk executive recalls. “We were looking at $3bn losses. That’s when we went in to turnaround mode.”
 
Costs were part of the solution, but the main problem was freight rates. At $1,000 per feu to Europe, shippers were paying the bunker bill and nothing else, Skou says.
 
He struck a deal with CMA-CGM to effectively cut out 10% of the Asia-Europe market. That same model was used on other struggling trades. For instance, Maersk closed up to four services to Latin America last year.
 
“The key is to make clear in our organisation,” Skou concludes, “that this is a business; we have to make a profit.”  [22/03/13]
 
 

NEED TO KNOW:  Maersk Line

Maersk Line is the world’s largest container shipping company. Its 2,585,000 teu capacity fleet gives it a 15.3% global share, according to Alphaliner. Subsidiaries include Safmarine and MCC Transport. The line’s history dates back to 1904. Søren Skou was appointed ceo of Maersk Line in January 2012.

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