Friday, October 7, 2011

Container Shipping Lines Sail Different Tack on Uncertain Freight Levels

Maersk and CMA CGM Have Different Approaches to Hard Times Ahead
Shipping News Feature

WORLDWIDE – Two press releases today from two of the world’s largest container shipping giants show the difference in attitude they have toward the parlous state of the economy and any uncertainty with regard to the tonnage levels of freight the box carriers will see in the coming years.

First up is Danish company Maersk Line which, as the globe’s biggest ocean borne container carrier has maintained a positive response with a strategy to increase its tonnage capacity through the use of ever larger ships. The ‘Triple E’ class of vessels will not start commercial activities until 2013 but training necessities demand that vessels are tested and crew cognisant with all procedures.

To this end for Maersk skipper Captain Gardastovu, Master of the giant Emma Maersk since 2006, his first encounter with a Triple-E container ship did not take place at sea, but in a simulator situated in Lyngby, Denmark. He described the experience as interesting and exciting, and also very useful, particularly with regards to manoeuvring.

“In this particular project we were able to see if it was at all possible to manoeuvre a vessel of this size with two propellers, one left-handed and one right-handed propeller, two rudders and the two bow thrusters, just to mention some of the things we tested.

“In the simulator you can feel that the Triple-Es are bigger than the E-types, Triple-E will also be much heavier than Emma Maersk, but surprisingly easier to manoeuvre because of the two thrusters, the engine capacity, and the enormous propellers. When the ship is fully loaded, you’re talking about more than 200,000 tonnes of vessel moving at speed, but the vessel will be able to stop and change direction in a harbour in just a few metres, and testing at a speed of 12 knots, she can stop in about 550 metres.”

Critics say that we are about to see a glut of new builds at precisely the time consignment levels are hit by falling orders and that Maersk vessels will only run at ecologically beneficial and economically viable levels if full to capacity or something close and whilst Maersk Line enthuse about their huge, new toys today’s release from CMA CGM is in stark contrast. In response to various rumours circulating amongst industry insiders, namely that the third largest container shipping line had ordered 20 vessels costing $2 billion from China, the company says in a statement:

“Responding to information circulating today, CMA CGM Group states that it has no short term plans to either purchase or long-term charter-in any vessels. The Group has a modern fleet of 408 ships, of which 92 are owned, that enable it to meet the current needs of its customers and provide them with end-to-end service around the world.

“In today’s economic environment, CMA CGM’s priorities are to reduce its debt and to strengthen its financial position. Looking beyond 2013 and in line with its long-term commitment to driving continuous improvement in fleet efficiency, the Group is looking at various charter projects with a number of shipyards and financial partners. While CMA CGM will pursue these non-binding discussions over the next few months, it has no intention to reach an agreement in the near future.”

This month the French group embarks on a rate restoration program which will see TEU rates rise as much as $250 per box (Full list of rate increases HERE) and its financial position demands that cutting debt remains its priority.