Maersk chief Andersen urges industry to order less ships

Despite growing global protectionism AP Moller – Maersk chief Nils S Andersen said they expect container shipping volumes to grow at 4.5% a year, however, shipowners to focus on market needs rather than speculating on newbuildings to improve returns.

In his keynote speech to the Danish Maritime Forum Andersen said: “We at our company are predicting containerised volumes to grow at around 4.5% per year, so we are in something that by normal standards is a very, very attractive market.

“Why is it then shipping is not an attractive industry, and we know its not an attractive industry as we know the returns, and when we compare them to other industries and generally speaking the 55,000 ships that cruise around on the oceans give lower returns than other industries.”

Given this scenario Andersen said his advice to the industry would be to, “Order a little less and look a little further into the future, maybe focus much more on market needs than we have been doing.”

While many investors and shipowners make counter-cyclical investment in ships as they believe prices will go up Andersen argued this concept did not hold in a non-inflationary market. “Just take the argument we are living in a low growth area, prices of everything are coming down, anything that is standard is coming down [in price], and you have technology risk, so why on earth don’t we believe that owning ships is a minus game.”

Looking to Maersk’s own strategy he explained, ”What we try to do is actually buy the ships we need for our business as late as possible, so that means we don’t speculate in low prices or high prices, we postpone the acquisition as long as we can.

“We think the market is overbuilt, there is plenty of shipyard capacity so the chance of making money speculating in ships is limited. I don’t many people who get the idea of speculating in the price of trucks or Volkswagen Golfs.”
Source: Seatrade Global

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