Maersk container operations post a $1.8bn loss in 2009

Wednesday, 10 March 2010

AP MØLLER-MAERSK’S container shipping division made an operating loss of US$1.8bn in 2009, as freight rates declined during the first half of 2009.

The Danish shipping giant does not expect an “acceptable return” this year. Its container revenue dropped from $28.6bn in 2008 to $20.6bn in 2009, while its operating loss of $1.8bn followed a profit of $969m in 2008.

It said: “The container shipping segment’s result reflected the tough market conditions, with falling freight rates and volumes.

“Freight rates declined during the first half of 2009 to a level well below break-even point. As a result, the industry reduced its capacity in several ways: taking tonnage out of service, postponing delivery of new vessels and reducing speed.

“These initiatives have buoyed spot rates, which rose in the second half of the year, but they need to rise further if the container shipping business is once again to be profitable.”

Freight rates for the group’s container activities were 28% lower than in 2008.

Maersk said: “A 7-10% addition of tonnage is expected for the global container fleet. Cargo volumes are expected to rise by 3-5% on 2009 and freight rates are also expected to rise.

“This will lead to a significant improvement in results, if the level of vessels taken out of service is sustained. However, rates are not expected to lead to an acceptable return in 2010.”

Maersk’s container division includes Maersk Line, Safmarine, intra-Asia carrier MCC, Container Inland Services and Logistics firm Damco.