Maersk Line delivers breakeven result despite record low freight rates
Maersk Line’s first quarter (Q1) 2016 result was USD 37 million, 94.9% lower than Q1 2015 (USD 714m) due to weak demand and record low freight rates, the company said in its press release. The first quarter in 2016 was characterised by a continuation of the global rate war in container shipping, driven by weak demand and significant supply growth.
The global container shipping demand growth was about 1% and the global container fleet (capacity) growth was above 7%. Consequently, the market conditions continue to be very challenging. Maersk Line’s average rate decreased by 25.5% to a record low of 1,857 USD/FFE.
Maersk Line announced three new services. Seago Line’s Irish Sea service, SeaLand’s Atlantico service and Maersk Line’s Transpacific TP18 service will provide new trade opportunities to customers in Mexico, the US, China, The British Isles, West Africa and the Mediterranean.
The organisational transformation and cost initiatives, announced 4 November 2015, are progressing as planned. The capacity reductions made in the last half of 2015 are also paying off. Maersk Line has increased utilisation, especially on its services from Asia to Europe. Utilisation on the trade is expected to remain high. However, rates on the trade are unsustainable, why Maersk Line will continue to work on improving profitability.
About Maersk Line
Maersk Line is the world’s largest container shipping company, known for reliable, flexible and eco-efficient services. Maersk Line serves its customers through 324 offices in 115 countries. Maersk Line markets its services through the Maersk Line, Safmarine, SeaLand (Intra-Americas), MCC Transport (Intra-Asia) and Seago Line (Intra-Europe) brands.
Maersk Line is part of the Maersk Group, headquartered in Copenhagen, Denmark. The Group employs over 88,000 people in some 130 countries. 2015 revenue: USD 40.3 billion.