Maersk feeder arm targets big growth in intra-Asia trades

Shipping giant AP Moller-Maersk wants to expand its share of the intra-Asia container trades six-fold to take full advantage of a sector that is already showing signs of recovery. The group is only a small participant at the moment, but the goal is to grow market share to a size in line with that enjoyed by Maersk Line in the deepsea trades.
Expansion plans for this region through Singapore-based feeder subsidiary Mercantile Cargo Consolidators Transport were outlined a year ago, with AP Moller-Maersk keen to fully exploit a sector in which it has had only a peripheral interest until now. Current market share is put at around 2%, whereas Maersk Line’s share of the inter-continental trades is between12% and 15%. That is the target for MCC Transport, according to chief executive Tim Wickmann.
Interviewed for the staff magazine Maersk Port, Mr Wickmann said growth would be achieved through third party as well as Maersk business, with MCC keen to keep its distance from its powerful affiliate. That was the reason for developing the intra-Asia trades under the MCC brand that is already a recognised feeder operator. “It is important that we hit the market as a serious, independent company,” Mr Wickmann said. “Our credibility depends on being a separate unit to maintain the feedering base of other shipping lines, but also to emphasise to the market that we, as a group, are committed to creating a trustworthy and respected intra-Asia carrier.”
MCC Transport, acquired when AP Moller-Maersk bought EacBen in 1993, operates fleet of about 40 ships offering services throughout the region.  But its exposure is described by Mr Wickmann as “not satisfactory” in a market that is expected to achieve annual growth of 9% over the next five years, and is poised to overtake the Pacific and Asia-Europe trades as the world’s largest in terms of containers shipped.
“We want to be a profitable key player in this market,” Mr Wickmann told Maersk Post.  “One challenge is to bring the position closer in line with the market share that Maersk Line enjoys in the longhauls.” He went on to acknowledge that the intra-Asia trades were very competitive, with MCC still a small player. “But we have the advantage of an already established extensive feeder network,” Mr Wickmann said.
While developing third party accounts, MCC will also keep itsclose connections with Maersk and also benefit from synergies through shared back-office services such as human resources, finance and IT.  “Our task is just to run as lean and cheap as possible, to be able to compete,” said Mr Wickmann.
Also in Maersk Post, group chief executive Nils Andersen said the economic crisis had forced a reduction in investment programmes, with more having to be self-financed. “We have to realise that even if the world economy stabilises, the business environment is still extremely tough — freight rates are far from satisfactory, trade volumes are down, and the volatile dollar together with general price pressure is negatively impacting our turnover and cashflow,” he told staff.
However, Mr Andersen reported progress on achieving three key goals; a simple and efficient chain of command; a company that is easy to do business with; and a competitive cost base.  Meanwhile, Maersk Line has formed slot charter agreement with Japanese lines NYK and MOL on a new Asia–New Zealand Service, NZ3. This replaces the previous joint service between Maersk, MOL, and Cosco.  Maersk said it would be purchasing slots.


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