1. business and industrial
2. shipbuilding

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ALPHALINER
Volume 2014 Issue 41
30.10.2014 to 06.10.2014
Weekly Newsletter
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We are living in a low growth, deflationary era and face technology
risks ... Shipowning is actually a negative sum game - if you buy a ship
today, it will incur financial costs,
depreciation and the risk of technological obsolescence. It will cost you
quite a lot to keep that ship.
We invest in ships as late as possible.
That means we don't speculate when
prices are low, we postpone the acquisition of vessels as long as we can
because the holding costs and risks
are too high.
We think that the (shipping) markets
are overbuilt. There is plenty of shipyard capacity so the chance of making money speculating in ships is
limited.”
Nils Smedegaard Andersen,
Group CEO,
AP Mø
øller-Maersk
Danish Maritime Forum
INSIDE THIS ISSUE:
Capacity surplus set to continue
1
3
Idle fleet/Charter Market Updates
6
Service Updates
2M aims for January launch following
FMC approval
G6/Zim to combine NYE/SCE FE-USEC
service
Seago Line to resume seasonal Morocco-Russia citrus fruit service
CMA CGM to reactivate MoroccoEurope citrus service
OPDR organises Agadir to Europe
service
Hanjin enhances S Africa presence
MOL improves Far East-Jeddah connectivity with extra link
CMA CGM & Emirates add Nhava
Sheva to ME-EAF joint service
X-Press Feeders reviews some Eastern Med loops
X-Press Feeders organises Adriatic
composite service
UFS goes on with Iberia-West Med
links through slots
Arkas becomes vessel provider on
Sermar’s Adriatic-NE service
Maersk launches SE Asia-NZ ‘Asia
Star’ relay service
Deliveries/New Order Updates
October deliveries
12
Chart of the week
New containership orders by month : 2009 - 2014(Sep)
600,000
Capacity ordered by month in TEU
“Shipping is not a very attractive industry … ships give lower returns
than most other industries. (The advice to new shipowners is) to order a
little less and to look a little bit further
into the future...
NOO owned
Carrier owned
500,000
NOO
owned
57%
Second set of
Maersk ‘EEE’ orders
400,000
Carrier
owned
43%
First set of
Maersk ‘EEE’ orders
300,000
200,000
100,000
ALPHALINER
0
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Maersk’s warning of overcapacity goes unheeded
For the past two decades, Maersk has led the industry in taking on risks by investing in innovative vessels, and the Danish carrier typically operated the largest ships on most mainline trades by quite some margin. Starting with the REGINA MAERSK-class of 7,000 teu, ordered in 1993, the list furthermore includes such noteworthy types as the 15,500 teu E-classes, ordered in 2004,
and the 18,340 teu Triple-E classe units to which Maersk committed in 2011.
These ships carried significant technological and commercial risks, as was also
the case with the numerous SAM-Max and WAF-Max types that Maersk Line
ordered in 2008 for the Latin American and West Africa markets respectively well before its competitors had comparable vessels.
However, Maersk has sought to grow “with the market” since 2012, in a departure from its previous strategy of outgrowing its competitors. Maersk also
adopted a new approach with vessel orders, now seeking to invest “as late as
possible”, to avoid or at least reduce the high holding costs of container ships.
Nils Smedegaard Andersen, A.P. Møller-Maersk Group CEO, warned last week
that owners who have entered the market to take advantage of low shipbuilding prices may have underestimated the cost of owning ships. In addition to the
costs of ship financing, owners face the risk of technological obsolescence in a
new deflationary era that do not guarantee that asset prices will continue to
rise, as was the case before. Emphasizing that ship investments generate poor
returns in an oversupplied market, Nils Smedegaard Andersen cautioned owners against taking on speculative ship orders.
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