Thursday, 21 August 2014
MAERSK Line and Mediterranean Shipping Co will not have to obtain antitrust approval in either Europe or China for their planned 2M alliance, AP Moller-Maersk chief executive Nils Andersen said when announcing the group’s second quarter results.Only in the US will the pair need clearance from the Federal Maritime Commission before starting their vessel-sharing agreement covering the east-west trades. The US body conducts a 45-day review of any notified agreement, although can stop the clock while seeking further information.
While the former P3 Network was scrapped after Chinese authorities declared it unlawful, the 2M alliance is a much simpler arrangement that will therefore be treated differently, said Mr Andersen during a conference call.
In Europe, companies are required to self-assess to ensure there is no abuse of a dominant position, with Brussels basically in favour of shipping consortia that reduce operating costs. Although there has been some negative press in China about 2M, the country’s legal process covering such co-operative agreements appears to be similar to Europe’s. Brussels said it would not intervene in the case of P3, before China’s Ministry of Commerce issued an outright ban.
However, even if 2M is treated differently, that does not preclude any subsequent investigation, should there be a complaint or suspicion of anti-competitive behaviour.
Mr Andersen said that Chinese legislation did not appear to give scope for a veto, although he acknowledged there was no absolute guarantee that China would treat 2M favourably.
Whereas Chinese regulators regarded P3 as a merger because of the intention of the three members to operate a joint fleet managed by an arm’s length central network centre, 2M will have a standard VSA structure. Maersk and MSC will keep their fleets separate. The alliance is expected to start early next year.
Mr Andersen disclosed that 2M was not thought to be subject to approval in China when announcing better than expected second quarter results for Maersk Line, which again bucked the industry trend by producing bumper profits at a time when most global carriers are still struggling to break even. Hapag-Lloyd, for example, lost money in the second quarter.
Surprisingly strong Asia-Europe volumes that were up 9% underpinned the results, said Mr Andersen. This is thought to reflect re-stocking in Europe, despite still weak economic conditions, with volume growth expected to slow in the months ahead once inventories have been replenished. Maersk has also seen a decline in backhaul cargo such as wastepaper and scrap shipments to Asia.
Imports to the US were a little weaker than expected, said Mr Andersen, but are forecast to improve in the second half.
Overall, global container demand was up by some 4% to 5% in the second quarter, with full year growth expected to be around the same level. Fleet capacity has expanded by 5% since the second quarter of 2013 and now stands at 17.9m teu, Maersk said.
Volume increaseThe world’s largest containership operator posted a net operating profit of $547m in the April-June period, equivalent to a return on invested capital of 10.8%, and up from $439m or 8.5% a year earlier. That brought first half profits to $1bn against $643m in the opening six months of 2013.
The ROIC was above the medium-term target of 8.5%.
The line has now achieved seven consecutive quarters of earnings before interest and tax margins of five percentage points above the industry average.
Revenue increased 3.8% to $6.9bn in the second quarter, lifting the six month turnover to $13.4bn.
The strong performance reflected a volume increase of 6.6% to 4.8m teu and was achieved despite a 2.7% drop in revenue per 40 ft unit to $2,880 as freight rates remained under pressure.
Unit costs were down by 4.4% to $2,585 per feu, with average bunker consumption per 40 ft box cut by 7.2% compared with the second quarter of 2013.
Total bunker costs were down by 2.8% to $1.3bn in the second quarter as fuel consumption was reduced, despite Maersk Line and the other container brands in the group carrying more cargo.
Scrapping of the P3 Network should have “no material impact” on the carrier’s anticipated 2014 results, the company said.
Savings gains through 2M would mainly be achieved through lower bunker costs as larger ships are deployed. With more vessels in the network, individual voyages will be shorter because of the ability to operate more direct routes, so also reducing fuel consumption.
Total savings will be a little smaller than P3 without the synergies of a joint fleet that was planned for the former alliance, but 2M will also be simpler to operate, Mr Andersen said.
While 2M partner MSC appears to be embarking on a new fleet expansion programme, Maersk has ordered nothing since its 18,270 teu Triple-Es. Of that 20-strong order, 11 are still to be delivered this year and next. Maersk’s fleet at the end of June stood at 2.7m teu.
Mr Andersen said Maersk Line had no immediate plans to resume ordering until all the Triple-E ships are delivered but kept a close watch on capacity needs.
“We are constantly looking at our capacity needs,” he said.
Although there is no urgent need to order, he indicated that market growth of 4% to 5% could signal a fresh round of newbuilding activity once all 20 Triple-E ships are in service.
Maersk Line, part of Denmark’s A.P. Moller-Maersk, and Swiss firm Mediterranean Shipping Co (MSC) are planning to launch their new vessel sharing service as early as January 2015, with their customers being notified of the network and transit times by September, Reuters reports.
Wednesday, 20 August 2014
Respect for the dockers' dangerous workplace, R.I.P.
My thoughts are with our brothers in Panama
The bad maneuvers pressure q live there in my former employment are responsible for accidents like hese q takes the lives of companion leaving his family in the deepest pain and q the loss of a kerido be nothing can compare neither gold nor silver peace to his soul spermos q Sitrebalcri Panama aga union has q q what Asher (6 photos)
Tuesday, 19 August 2014
Christmas Rush Demands Extended Hours of Opening
UK – It may be Summer, but for those enmeshed in the supply chain Christmas looms larger on the horizon day by day. Recognising thisDP World Southampton will open its container terminal facilities all day on Sundays in the run up to the annual sales fest to give shipping agents and cargo owners an extra day to collect their freight and ensure they can make deliveries on time.
The bank holiday has an impact on the industry as hauliers try to fit five days of deliveries into a four day working week, while container terminal operators, like DP World Southampton, still need to deliver the high level of service that its customers have come to expect, so the handling group will now start opening its gates all day on Sundays in preparation for the August bank holiday to help British businesses play catch up. The terminal already opens as normal on bank holidays but now the terminal is also going to open from 07.00 on Sunday to give its customers a head start. Steve McCrindle, Head of Operations, DP World Southampton observed:
“By opening up for the full 7 days for our customers, we believe we are providing more flexibility and opportunity to collect cargo which will assist the supply chain with their import deliveries. Traditionally there has not been the demand for weekend opening, but with the August bank holiday and the peak session upon us we will see an increase in volume and by extending our opening hours we can reduce the pressure on everyone in the supply chain.
“Often the container terminal feels the pressure of the bank holiday for a few weeks afterwards but it doesn’t have to be this way. We are a 24 hour operation, we service the ships 24 hours a day, 7 days a week, so there is no reason why we can’t service our landside customers too.”
From Saturday 23 August the terminal’s new opening times will be:
Monday to Friday - 24 hours, Saturday – 00:00 – 18:00, Sunday – Open from 07:00