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Denmark's Maersk Line to spend $3 billion per year on new ships

Published 24/09/2014, 11:29
© Reuters The MV Maersk Mc-Kinney Moller, the world's biggest container ship, arrives at the harbour of Rotterdam
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By Ole Mikkelsen

COPENHAGEN (Reuters) - Denmark's Maersk Line will spend around $3 billion (1.83 billion pounds) a year from 2015-19 on new ships to buttress its position as the world's biggest container shipping company, it said on Wednesday.

"The current orderbook (is) not sufficient to grow with the market," Maersk Line, the world's largest shipping company by number of vessels, said in a presentation for analysts at the company's headquarters in Copenhagen.

"Vessels will support a low cost position by being the largest possible in each trade," it said in the presentation.

It was not immediately clear how many ships the company would order. It currently has 500 in its fleet.

Consulting group Alphaliner predicted this month that world No. 2 Switzerland-based MSC Mediterranean Shipping Company could overtake Maersk Line by 2016 based on the industry's current orderbook.

Maersk Line, a unit in the Danish conglomerate A.P. Moller-Maersk (CO:MAERSKb), controls around 20 percent of transported goods on the world's busiest route between Asia and Europe. Globally, its market share is around 15 percent.

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.

© Reuters. The MV Maersk Mc-Kinney Moller, the world's biggest container ship, arrives at the harbour of Rotterdam

Of the 15 biggest container shipping companies in the world, only four managed to make a profit in the first half of 2014. Maersk Line, the most profitable, reported an earnings gap of five percentage point above peers for seven consecutive quarters.

(Reporting by Ole Mikkelsen; editing by Susan Thomas)

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