4th and long …
Ever see a pack of coyotes fighting over some scraps of meat?
Maersk is frequently accused of being the aggressor in a destructive war of attrition that could stand to leave the Danish shipping giant as one of the few survivors and with the lion’s share of the market.
Nils Andersen, Maersk’s CEO, isn’t denying it, either. “It would be natural if the smaller players in the business, or their banks, start questioning whether it’s a good idea to keep competing. We are well-positioned for a stretch of tough competition,” he told reporters.
The container industry will lose money this year as oversupply sends freight rates plunging, Andersen said. In 2009, the first year the first year the industry failed to turn a profit since the 1970s, Maersk Lines idled ships. The company won’t do that this time and is ready to reduce prices to preserve market share, Andersen said.
“Maersk Line is willing to sacrifice some earnings in the short term for a better and more profitable market in the long term,” Jacob Petersen, an analyst said by phone. “In the last crisis, Maersk Line was among those that helped the sector recover, which probably saved some weak rivals from bankruptcy. This time, Maersk is leaving it to those with the most at stake to lay up ships and improve conditions,” Pedersen said.
But Alphaliner sees it differently: “The attempt to force out competitors through a destructive price war has so far failed to achieve any results. So far, there have been only limited capacity withdrawals, even as freight rates are expected to remain depressed until the end of the slack winter season …
“These is also talk of the three big Japanese carriers merging into a single company, putting a ‘Japan Lines’ in fourth place behind Maersk, MSC and CMA CGM.”
“The hardball game could continue well into 2012,” Finn Bjarke Petersen, an analyst at Nordea Bank said. The world’s second- and third-largest