Maersk Line addresses the equipment shortage situation

17 June 2010

The container shipping industry is entering peak season, which traditionally brings about an increase in cargo volumes. With the unexpectedly strong rebound in the demand for container shipping already seen in the market, Maersk Line also expects that the peak season will see an unprecedented shortage of equipment (containers).

”The present market situation is unique. We are experiencing a demand surge in most trades, which is a development that is both unprecedented and unexpected by us and our customers. For example, the Asia - Europe trade is growing by 23% (1) compared to the market’s single digit expectation just six months ago. Therefore, we already see a very tight equipment situation. And we expect an even more pronounced and serious shortage of containers in the coming months as we enter the peak season,” says Lars Reno Jakobsen, Head of Network and Product and member of Maersk Line’s Management Board.

Following the recession in the market at the end of 2008 and through 2009, many container shipping and container leasing companies stopped sourcing and producing equipment. As carriers and shippers did not expect the current demand surge, the necessary equipment has not been ordered in 2010, ultimately resulting in the global shortage in equipment.

In response to the equipment shortage, Maersk Line has initiated production of new containers and leasing of containers. We have also re-activated laid-up container ships to assist in repositioning containers as fast as possible from e.g. the east coast of North America and Latin America to Asia.

“We have been working hard the last couple of months to minimise the inconvenience for our customers. And we are adamant that we continue to live up to the customer commitments we make, also through the peak season,” says Lars Reno Jakobsen.

Last week, Maersk Line announced a Peak Season Surcharge (PSS) for the Far East – Europe trade applicable from 15 July 2010. The surcharge will assist Maersk Line in recovering the higher costs caused by the increased volumes and equipment shortage (e.g. port costs, extraordinary vessels deployed to reposition containers and leasing of same) and ensure that Maersk Line can continue to offer its services in a sustainable manner. To make it easy and transparent for our customers in this trade we are only applying one Peak Season Surcharge and we will therefore not announce separate surcharges or rate increases in connection with the peak season.

Maersk Line expects the equipment shortage to last through the third quarter of this year and will continue to work close together with all stakeholders, not least our customers, to further reduce equipment turnaround times.

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(1): Year-on-Year. Source: ELAA

Maersk Line, press release