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Maersk boss says they got demand wrong when ordering 18,000-TEUers

MAERSK Line CEO Soren Skou is now relying on the P3 vessel-sharing Alliance with CMA CGM and MSC to cut costs and reduce capacity on the Asia-Europe route, after admitting the company misjudged demand strength when ordering twenty 18,000-TEUers in 2011.
"It's pretty clear that when we look back to early part of 2011 when these ships were ordered, our view on growth was different than what it turned out to be," Mr Skou told the Wall Street Journal.

The shipping line is expected to deploy US$3.7 billion in ships on the P3 Asia-Europe route in a bid to cut annual costs eight per cent and reduce the number of ships deployed on the major tradelane from 300 to 250, he said. 

However, the 20 mega-ships in the Triple E series are expected to boost capacity by six per cent, he was cited as saying. 

The Journal of Commerce report highlighted that while the P3 Network is expected to lower costs by deploying fewer larger vessels, it is not likely to help ease the overcapacity that has been dragging down freight rates globally. Freight rates on the Asia-to-Europe trade have dived 30 per cent this year to below $1,000 per TEU. 

Together, P3 carriers will command more than 40 per cent of total capacity on the Asia-Europe trade, if it gains regulatory approval from the European Union. The Alliance is seeking to launch its services in the second quarter of 2014.
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