Maersk gets off to a positive 2007

IT’S A year since the rebranding of the world’s largest shipping line. Created through the amalgamation of Royal P&O Nedlloyd and Maersk Sealand, Maersk Line was officially launched in February last year. With a containership fleet of 500 vessels and a comprehensive global network, it’s all systems go for 2007. Maersk Line South Africa managing director Per Heisselberg offered his perspectives in conversation with FTW editor Joy Orlek.
FTW: What was the reason for the rebranding and have you achieved your objectives in the first year? ML: With the new brand Maersk Line’s goal was to create opportunities in global commerce by enabling our customers to source goods from anywhere in the world, creating efficiencies in their supply chains and making it possible for commodities to reach new markets more quickly. The benefits of the P&O Nedlloyd acquisition can be seen in the globally expanded network and the increasing opportunities for our customers to reach different global destinations.
FTW: What are some of the major challenges facing shipping lines in general and what initiatives have you put in place to deal with these challenges?
ML: Shipping capacity heads the list, especially if we’re talking imports from the Far East.
Container shipping is – and always will be – a cyclical industry driven by the imbalances between capacity supply and demand.
Although we have upgraded our service, demand continues to exceed capacity – and this has been the case even at this traditionally quiet time of year after the Chinese New Year.
It has not yet resulted in a rate increase, however there is a definite need to get rates up to a more realistic level in certain trades and one of those is the Far East/South Africa route.
On the export side we have also seen a fast start to the year. We had a super January and reefer plugs especially to Europe are in high demand. Volumes are much higher than our customers predicted even a month ago and one reason for this may be the trend to buying and selling electronically via portals. Today there may, for example, be access to lots of meat from Brazil that was traditionally bought in Australia and buying patterns are changing, which makes it very unpredictable.
And we’re not talking 5 or ten tons, but 50 reefer containers in one order.
South African exports increased by 15-18% in 2006. We are continuously working on adapting to the changes in demands and have already put certain route improvements into place.
FTW: Other challenges affecting your business? ML: Political decisions on trade restrictions are a big one. For example the recent quotas on garment imports from China.
You get a couple of months notice and getting containers in the right places takes time. You need to know where people will start buying from when restrictions are imposed on SA importers. The textile industry in Bangladesh, for example, has benefited, but their infrastructure has not been able to cope. Again you have fast shifts of substantial volumes, and that’s a difficult one for shipping lines to plan.
FTW: How are you dealing with South Africa’s infrastructure overload?
ML: We’ve seen a huge import surge in terms of automotive, which is very positive for the country but places enormous strain on the road network – and this is particularly evident on the road leg between Gauteng and Durban.
We are working with Spoornet to get more containers onto rail, which would be in everyone’s interest and far more environmentally friendly.
In the meantime we’re struggling with inland capacity, particularly from PE and Durban to Johannesburg.
FTW: There appears to have been a fair amount of service realignment in recent months – is this trend likely to continue?
ML: We are always looking at improvements. At present we are working with NYK and Hamburg Süd on a service between South Africa and the East Coast of South America. It cuts two weeks off the transit to South America which will open substantial opportunities for more exports to those countries.
There is a definite need for more capacity from South America to South Africa and we hope that our new service will fill that gap.
We also have two departures a week now to Europe with a new two string operation to Asia.
We are constantly reviewing and assessing new and current routes.
FTW: How does Coega feature in your future plans?
ML: We have been in discussion with SA Port Operations because we have to know what their plans are for Coega. We need to plan our transhipment hubs – whether to use Port Louis, Walvis Bay or Coega – and we need to plan now for 2012.
We find the port authorities far more customer-focused than ever before and they understand our need for deadlines.
FTW: What are your views on port congestion in Durban?
ML: Port congestion is a global challenge. Many ports worldwide are in the process of expanding and developing infrastructure to accommodate the overwhelming growth in trade.
But we are encouraged by Transnet’s proposal to embark on a port expansion project for Durban with investments totalling R4.5bn.
The development of the new container terminal at Pier One is on its way and is expected to start handling ships from May 2007.
FTW: Any particular focus areas for the year ahead?
ML: A number of processes have been put in place to increase internal efficiencies, strengthen our customer proposition in the market place and aid the ‘return to profit’ drive.
These range from an electronic booking and documentation service to acting on feedback from customer satisfaction surveys.
Environmental issues are also an inherent part of our values and this notion is encapsulated in everything that we do – from our CSI initiatives to the design of the vessels. At the core of these initiatives is our constant awareness of the relationship between the business and natural world.