Maersk Head Criticizes State-Funded Ship Building


Maersk’s Chief Executive, Soren Skou, has criticized the level of state funding that container shipping companies are receiving.

The head of Maersk, which operates Maersk Line — the world’s largest carrier, used part of his time at Singapore Maritime Week 2018 to caution that the government subsidization would cause the market to fall victim to overcapacity and unnecessary price reductions.

Skou said that container shipping is “still a very competitive industry” despite its recent consolidation.

He added that it was not necessary for governments to “throw money at container shipping”, adding that the market would “sort it out”.

In the last month, Hyundai Merchant Marine, the dominant South Korean carrier, has unveiled plans that will almost double its fleet size, with 12 vessels above 20,000 TEU and eight of 14,000 TEU joining its existing fleet.

HMM’s orders, which will be sent to shipyards on April 10, 2018, are part of the Korean government’s plan to restructure the country’s shipping sector.

Lars Jensen from consultancy SeaIntelligence recently forecasted the industry’s developments as far into the future as 2025 in his 'Liner Shipping in 2025' Port Technology technical paper

Other Asian shipping companies that have been offered state financing include Taiwan-based Evergreen Line and China’s COSCO Shipping, which was offered financial aid towards the end of 2016 after the Hanjin bankruptcy.

Though Evergreen Marine was entitled to part of the aid, it did not apply for use of it.  

According to shipping analysist firm Alphaliner, both carriers have made the next biggest gains in order book fleet size after HMM, relative to their existing capacity.

The increase in shipping orders has also come from the send and third largest carriers, MSC and CMA CGM.

Despite this, global shipping consultancy Drewry recently released findings that suggest that containership orders will, for the moment, stay true to demand.

According to different commenters, Drewry has found that 2018 is either going to bring “a tsunami of new capacity that will drown the container market’s nascent recovery”, or — in the consultancy's opinion — newbuild deliveries will be largely manageable.

Watch: Neil Davidson, Senior Analyst, Ports and Terminals, Drewry, has answered questions about the biggest challenges facing the container shipping industry 

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