Maersk Line Suffered $602 Million Loss in 2011
Maersk Line suffered a $602 million loss in 2011, after making a record $2.6 billion profit in 2010, according to a recently released financial report from the world’s largest ocean carrier.
The extreme loss was driven by increasingly lower freight rates, mainly on the Asia-Europe route, as well as a 35 percent increase in fuel costs. The Maersk Line loss dwindled A.P. Moller-Maersk’s net profit by 33 percent to $3.4 billion.
Maersk’s quarter-by-quarter losses echo the forceful push for market share that is held responsible for the decrease in freight rates across most liner routes. The Journal of Commerce states that cargo volume soared 18 percent in the fourth quarter of 2011, but the average freight revenue was 12 percent down on the same period in 2010. Maersk’s fourth quarter loss was $663 million, compared to a $388 million profit in 2010. This amount was also more than double of the third quarter loss.
Maersk revealed it lost $75 on each 40-foot container shipped in 2011 compared with a $384 profit a year ago. They were able to boost the Asia-Europe volume, but rates still declined by 19 percent. Trans-Pacific rates also slightly dropped.
Maersk recently announced their plan to cut Asia-Europe capacity by about 9 percent, as well as activating lay-up plans and making better use of super slow steaming. The company also plans to optimize pricing practices and adjust its capacity to expand market stability.
Maersk officials, however, have made it clear that they will defend their market share position at any cost.