Maersk Line: “The market is in difficulty, slow steaming is the only solution”

Istanbul - Nielsen (Maersk Black Sea Cluster): “Positive results in the first quarter of the year thanks to low fuel prices.”

di Simone Gallotti

Istanbul - “Everyone always asks us whether with the price of oil so low, we can speed up our ships. It isn’t possible, we will continue with slow steaming. On the other hand, one only has to look at the market conditions to understand why we continue to sail slowly.” Lars Oestergaard Nielsen was recently appointed the Managing Director of Maersk Line for the Black Sea area. At the Black Sea Ports and Shipping event in Istanbul, the manager cooled enthusiasm and overconfidence in the future and made it clear that the prospects for 2015 are not so great. In particular, Nielsen identified overcapacity as the biggest problem. The fact that supply is stronger than demand in transportation, and the numbers for the first quarter make it clear that market conditions are “not entirely positive” for the future. “Global capacity will grow by 7.9% over the course of this year and by another 5.3 points in 2016,” the Danish manager explained, “as of now, the order book represents 18% of the global fleet - with these numbers, overcapacity will continue to be a challenge in the future.”

The solution for Nielsen is to maintain low speeds, “despite the drop in the price of fuel, so as to maintain low operating costs.” And that’s why almost all the lines have reported positive results in the first quarter: “We have done well, Maersk has achieved very positive results, but the numbers were driven by a factor that is more financial than industrial: the low price of bunker (-49%) and the appreciation of the dollar compared to other currencies.” This is not even a good starting point, as Nielsen went on to explain, because in the next three months, the numbers say that freight rates will rise by 12%, while the price of bunker will increase by 11%, almost cancelling out the advantages derived from an increase in freight rates. The spot sector will continue to drop another 30%. Maersk is very much focused on its clients and on a policy of long term objectives that will lead to an 80% increase in volume by 2020 (compared to 2007 levels).