[181011.EN.SEA] 'Daily Maersk' Volume, Eco-law Embrace, Said Designed To Eliminate Rivals

THE new "Daily Maersk" service is an attempt to eliminate smaller carriers from the Asia-Europe trade by using market size and economies of scale that would eliminate weaker carriers out to enlarge market share, says a Swedish shipping analyst.

At a Hong Kong press conference, the Danish shipping giant earlier denied that it had embraced environmental regulations enlarge market share by imposing unfunded mandates that make it more difficult for smaller operators to function.

"Maersk is tightening the screws and putting particular pressure on smaller companies with weak balance sheets," Handelsbank analyst Dan Togo told Copenhagen newspaper Jyllands-Posten.

"Maersk sees it as an investment where you have to make do with poor returns in exchange for getting a better balance in the market," he said.

Mr Togo said a clear signal of Maersk efforts to dominate the Asia-Europe trade is that it has not taken a single ship out of service in the last two years despite growing overcapacity while in 2009 it laid up 25 ships.

"Maersk Line, Mediterranean Shipping Co [MSC] and an alliance of four companies, primarily Cosco, are putting on the thumb screws," he said.

"The current volatility and uncertainty we witness in many markets has triggered large rate instability, which is not supported by current fundamentals, but by an expectation that supply/demand may worsen in the near future," he said.

Not so, says Vincent Clerc, vice president of Maersk's Asia-Europe service. "We are not in the business of waging a price war, but in the business of solving problems for our customer and offering sustainable transportation solutions to them. Our products and cost base are very competitive and allow us to weather this volatility."

The Danish carrier, the world's biggest container shipping line, made the statement in an email exchange with Newark's Journal of Commerce. This was prompted by reports that its order for twenty 18,000-TEU ships and its new "Daily Maersk" service on the Asia-Europe trade were aimed at dominating the trade.

In the same vein, a reporter in Hong Kong, asked Maersk president Eivind Kolding, at a whistle stop on his worldwide road show to promote "Daily Maersk", whether the company's whole-hearted embrace of rising environmental regulatory measures was in part supported by knowledge that the increasing number of unfunded mandates impose greater burdens on smaller players.

The question was prompted by Mr Kolding's earlier statement that only larger players with super ships could expect to participate fully in the Asia-Europe trade with profit. Mr Kolding denied this was his motive.

Asked if he believed in "global warming" or rated environmental fears as gravely as they are presented, he said: "I do not want to engage in a scientific debate."

Source : HKSG.