Thursday, December 18, 2014
Maersk Asia-Pacific expects boost in regional demand
Shipping giant Maersk Line expects stable but slower growth in regional demand in Southeast Asia, according to Lars Mikael Jensen, Maersk’s Asia-Pacific chief executive.
He also said the container line has yet to see any major benefits from the recent fall in bunker and crude oil prices.
"Our long-term contracts have a mechanism called bunker adjustment factor, which allows us to adjust our pricing depending on the rise and fall of bunker prices," Jensen said. "This ensures mutual hedging and we're not profiting from low fuel prices."
Oversupply has seen Brent futures continue to plunge this year, briefly touching a 5.5-year low at $62 a barrel last week.
"How the lower fuel prices can benefit us is that it will potentially stimulate economic and trade growth," he said. "We have yet to see that happen."
Stronger trade growth in Southeast Asia will be a key focus for Jensen, who was appointed regional head in September.
"Globally, we expect 3 to 5 percent growth in trade - still stable, but a far cry from the 8 to 10 percent, say, a decade ago," he said. "But Southeast Asian trade with the world is likely to be higher than that average, at 6 to 7 percent going forward. My ambition is to grow Maersk Line in the Asia-Pacific in tandem with that above-average trade growth."
Jensen noted the competition is fierce as industry players vie aggressively over pricing amid over-capacity and slowing global trade.
"Margins are indeed under pressure and freight rates have remained on a general downtrend," Jensen reported. "We are only in the middle of the pack when it comes to regional market share - but we will not grow that by being dirt cheap. We will grow because of our operating efficiency, our product range and our ability to help global customers enter new territories in the emerging South-east Asia."
For more of the Asia One story: business.asiaone.com
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