Change at the helm comes at a crucial time for Maersk
With the departure of Maersk Line’s CEO Eiving Kolding, the new boss will have to be the same as the old boss if he is to successfully implement the vision of his predecessor.
Kolding was architect of the line’s aggressive plans to expand market share and service quality. Yet he hands over the reins of the world’s biggest carrier at the most troubled time in the container shipping industry’s history.
Freight rates on North Europe have plummeted and will stay there at least until after Chinese New Year in late January, no matter how much consumers spend.
On the transpacific the rates are weak and shippers are resisting liner efforts to get prices up in time for the start of the annual contract negotiations in the first quarter.
The industry is massively over supplied with capacity and demand expected to remain weak deep into the first quarter.
Maersk itself has 10 18,000 TEU ships coming online in the next few years with another 10 after that.
In another indication that he was on board the Kolding philosophy, Skou said the CMA CGM-MSC alliance was good news because it would promote consolidation in the industry. Kolding said after the global financial crisis that there were too many carriers in operation, and several should have been allowed to fail.
But Maersk won’t be in the shipping line buying business next year. The 18,000 TEU vessels will give the carrier a massive organic growth injection that will be difficult enough to manage without acquiring something else.
With its Daily Maersk service, the world’s biggest carrier revealed the future of container shipping, where service and reliability would hopefully remove the rate volatility that has long ruled the business. Asia-North Europe is the trade where economies of scale pay the greatest dividends, and that explains why the other carriers are forming partnerships and vessel-sharing alliances in a desperate effort to compete.
Where once the chase for market share was a race to the bottom, for now it seems to be a race to the top.