Maersk Moves to Meet Changing Tides of Trade

Targeting such geographic areas as the Eastern Mediterranean, Africa and Latin America while cutting back on transits between Asia and Europe, the shipping giant is reacting to the realities of fuel costs and emerging economies.

Maersk Line explains that in reaction to what it calls significant increase in fuel costs it finds it necessary to remove capacity from Asia-Europe lanes to “ensure the sustainability of our services.” Previously it reduced overall space by 2,000 FFE (forty-foot equivalent) weekly in its AE5, AE7, AE2 and AE8 services. Even with the reductions the shipping line maintained its coverage in all corridors within the network.

The company has served Sub-Saharan Africa for more than 40 years where it has a 25% market share and its own offices in 35 countries in the region. It notes that average growth of exports in the region is currently 7% per year and import growth is 11% annually.

With these facts in mind, senior vice president Michel Deleuran, Maersk's Head of Network & Product, announced the signing of an agreement with Hyundai Heavy Industries for delivery of 18 container vessels in 2011 and 2012 that he expects will be deployed in trade to and from Sub-Saharan Africa. Each of the new ships will carry 4,500 TEU (twenty-foot equivalent) and will be equipped with a waste heat recovery system that reuses excess exhaust heat to generate energy for propulsion or on-board electric consumption.

Over the past five years, trade between Asia and the East Coast of South America has grown at a 20% clip annually and is projected to continue to show double-digit growth over the next five years. Trade between South America and Europe has been growing at 25% annually. In reaction to these increases, Maersk has ordered 16 new container vessels from Daewoo Shipbuilding and Marine Engineering Co. for delivery in the 2010-2012 time frame. Each ship is to have a capacity of 7,500 TEU and to be equipped with reefer plugs that will enable them to carry 1,700 refrigerated containers each. As with the other vessels on order, these will have waste heat recovery systems.

While Brazil and Argentina, in particular, have very fast growing consumer markets, trade between South America's East Coast and Europe is driven by export of food such as poultry, meat and fruit, all of which require refrigeration in transport. In discussing the order of these new ships, Deleuran says, “We expect continued strong growth in these markets and that this order shows our long-term commitment to providing service and support to our customers' increasing business in these trades.”

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