Maersk Line delivers a 2014 result that is USD 831 million higher than 2013. We achieved this by lower unit cost and increasing our volumes while the rates decreased by 1.6%. The lower unit cost is the result of a better vessel utilisation and network efficiencies.
Revenue in 2014 was USD 27,351 million. Volumes increased by 6.8% to 9.4 million FFE.
The volume increase is above the 3.6% market growth. However, our market share (capacity) remains at 15% and our long-term strategy is to grow with the market.

“I am very satisfied with our 2014 result. Our return on invested capital is also very satisfactory and above our medium and long-term targets of 8.5% and 10% respectively. We have achieved this on the backdrop of low market growth and rates under pressure. We have successfully managed our capacity and reduced our costs. I believe 2014 proves that we have the right strategy in place,” says Søren Skou, CEO of Maersk Line.

In September, Maersk Line announced investments plans of approx. USD 3bn p.a. in 2015-2019. To ensure that we can continue to grow with the market, we need more vessels and containers by 2017. We expect to start ordering new vessels in the spring of 2015.

“Our financials are strong and our strategy is working. But we cannot rest on our laurels. We do business in a highly competitive industry with over-capacity. We must remain focused and continue to defend our market position with cost leadership and improved products for our customers,” says Søren Skou.

2015 expectations
Maersk Line expects the underlying result for 2015 to be above the 2014 underlying result of USD 2.2 billion, in part driven by the implementation of our new East-West network and lower fuel cost.

We expect the global demand to grow by 3-5% and nominal supply to grow by 5-7%.
We expect that rates overall will remain under pressure as supply is expected to grow slightly faster than demand. The low oil price will not have a direct impact on the rates. Rates continue to be determined by the supply and demand balance in each trade, not the fuel price.
We expect a net positive impact from lower oil price on global container demand. However, certain trades will be negatively affected. In the Middle East, West Africa and Latin America, we expect lower growth than previous years due to the economies’ large exposure to the oil price.
Low oil price impact on Maersk Line’s network
The low oil price will not entail significant changes to Maersk Line’s network and service speed.
Over the last five years, we have added vessels to our network to enable slow steaming. E.g.  our Asia-Europe services have gone from nine (9) to 11 vessels per service. Slow steaming will remain a key element in managing our network and capacity. For a number of reasons:
We have not achieved the full potential of slow steaming. At a bunker price of 300 USD/MT, 11 vessels on an Asia-Europe service is in fact the optimal number of vessels.

Since 2007, the time spent in port by our vessels has increased significantly. Port and terminal productivity has not been able to follow suit with the increase in vessel size. On an Asia-Europe round-trip the time spent in port (one vessel on average) has increased from 12 days (2007) to 18 days.

The new generation of ultra large container ships (+14,000 TEU) are designed and built to slow-steam. They are not able to reach the high speeds seen before 2008.
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Furthermore, changing speed on our East-West network (193 vessels) is costly and complex. It would include finding alternatives for freed-up vessels and termination/renegotiation of all charter, vessel-sharing and terminal agreements.

“The bunker price may rebound, in which case a network designed for higher speed would be very uncompetitive. Moreover, we want to be as energy-efficient as possible, limiting emissions as much as we can. We will continue to slow-steam,” concludes Søren Skou.

In November 2014, Maersk Line announced an ambitious CO2 target to reduce 60% in emissions per container by 2020 (2007 baseline). We reached the previous target of 40% in 2014. We have demonstrated that we can grow our business and at the same time decrease fuel consumption and cut CO2 emissions. In 2014, Maersk Line’s total bunker consumption was 1.7% lower than in 2013. Bunker efficiency improved by 7.9% to 921 kg/FFE (1,001 kg/FFE in 2013).

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