The container activities of Maersk showed considerable progress in result compared to the first half year 2006 as was expected, however, the total net result was negative by USD 168 million. The number of transported containers in Maersk Line increased by 3%, which was lower than the general market growth as a consequence of the focus on earnings rather than market share.

In the first half year 2007 Maersk Line transported close to 3 million FFE (40 foot equivalent container units), corresponding to an increase of 3% compared to the same period in 2006. Maersk Line has reduced capacity in loss-making markets. The focus has been to improve earnings, e.g. by moving tonnage from loss-making trades to trades with better earnings. With 13% increase in volumes Maersk Line had growth in the most important trades from Asia to Europe, and increased the number of routes in this market. The African and the Oceania trades had also reasonable growth with 12% and 8% volume increase, respectively.
In the transpacific trades, however, Maersk Line realised a decline in volumes of 12% while the volumes on the transatlantic trades were unchanged. The financial result on the transpacific trades is unsatisfactory as the costs of containerised transport to North America and especially to the inland destinations, are not adequately compensated through freight rates. Consequently, Maersk Line has simplified and reduced the route network including the land-based activities.
The average rates for Maersk Line were both before and after compensation for higher fuel costs at the level of that in the first half year 2006. During the first half year 2007, however, the rates showed an increasing tendency, especially on the Asian-Europe trades where the rates declined in the first half year 2006. The bunker prices were on average slightly below those in the first half year 2006, but during the first half year 2007 the bunker prices increased considerably and reached at the end of the first half year a historical high level, approx. 35% above the level at the beginning of the period. Variable unit costs increased by approx. 2% compared with the same period in 2006. This is partly due to the increased costs of repositioning of containers as a consequence of the increasing imbalance in global trade, the declining USD exchange rate as a considerable part of the costs is in other currencies and cost pressure in ports and from inland transport where the capacity is scarce. The total unit costs including depreciation were at the same level as those in the first half year 2006.
The service from Maersk Line to customers is still being improved and with the considerable ongoing IT investments and the standardisation of processes, Maersk Line will be well prepared for providing even better service to customers.
In the first half year 2007 Maersk Line took delivery of 15 newbuilt container vessels and sold 13 older vessels.

Safmarine transported about 295,000 FFE in the first half year 2007 equivalent to an increase of 14% compared to the same period in 2006. On average, the rates were slightly above those of the first half year 2006 and the costs slightly below. The operational result was somewhat above that of the first half year 2006. The net result was below that of the first half year 2006 which was positively affected by gains on sale of ships.
In the first half year 2007 Safmarine took delivery of two 4,150 TEU container vessels.

Maersk Logistics had continued growth in revenue, but the positive result was below that of the first half year 2006. Maersk Logistics’ forwarding business has now been consolidated under the name of Damco. The aim is better service to small and medium-sized customers.

Source: Maersk

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