Tuesday, August 9, 2016

MAERSK QUITS TEN PORTS IN CHINA

Is this another step on the container line road to perdition?  What about BCOs managing supply chains?




Maersk Line quits 10 Chinese ports, to focus on profitable ones

COPENHAGEN Maersk Line, the world's biggest container shipper, has decided to stop services to and from 10 ports in China as part of a drive to reduce costs.Maersk Line, a unit of Danish conglomerate A. P. Moller-Maersk (MAERSKb.CO), has, like other container shipping companies, been hit by historically low freight rates in the first half of this year due to a slowdown in global growth and many new, larger vessels being added to the market.
Maersk Line said it would stop serving ports in Chizhou, Luzhou, Yingkou, Jinzhou, Rizhao, Yueyang, Lijiao, Taiping, Jiaoxin and Nansha old port.
The ports are currently served by feeder vessels that move goods to larger ports where mega-vessels with capacity of up to 20,000 20-foot containers take over and transport the goods to ports mostly in Europe and the United States.
Maersk Line said in a statement it would focus on ports that offered the best growth prospects and opportunities for its customers.
"The closure of service in these Chinese ports should not be interpreted as a change of strategy," Maersk Line wrote in an email to Reuters, declining to give further comments.
The A.P. Moller-Maersk group will publish second-quarter results on Friday and Maersk Line is expected to post a loss of $67 million, according to a Reuters poll.
Last month, German-based competitor Hapag-Lloyd (HLAG.DE) cut its full-year profit outlook as freight rates were significantly weaker than expected.
Driven by the container shipping downturn and a slump in oil prices, the A.P. Moller-Maersk group's chief executive Nils Smedegaard Andersen was fired in June and Soren Skou, head of Maersk Line, was named group chief executive.
Maersk Line is currently represented in 41 locations in China, which has been recognized as the world's factory since the late 1970s. In recent years, Chinese growth has slowed.

(Additional reporting by Teis Jensen; Editing by Adrian Croft)



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