Maersk ordering 10 'mega' container ships: report

MAY 11, 201511:00 PM

[COPENHAGEN] Danish shipping giant AP Moeller-Maersk, the world's largest container transporter, is close to ordering 10 "mega" container ships even as freight rates are under pressure from overcapacity, it was reported Monday.

The order, worth more than US$1.5 billion (1.34 billion euros), to South Korea's Daewoo "will be announced in coming weeks and deliveries will start in 2017," the Wall Street Journal said, citing people familiar with the matter.

The 'mega' ships, each capable of carrying more than 18,000 containers, would "likely" be deployed on routes between Europe and Asia, it reported.

Maersk Line, the group's shipping unit, has managed to outperform the market as the sector was hit by overcapacity after the financial crisis.

But even so, the company said in February's annual earnings report it had minimised "the impact of the low and volatile freight rate environment" through "active capacity management." Maersk expects global growth in container shipping to reach between three and five percent this year, compared with four percent last year. That compares with global annual capacity growth of around eight percent predicted by analysts who spoke to the Wall Street Journal.

The Danish group last year partnered with Swiss-Italian MSC under a deal similar to code-sharing agreements among airlines, allowing the companies to put cargo on each others vessels.

AFP