Maersk puts more focus on imports
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Maersk Line, one of the world's largest container carriers by volume and market value, is planning to further combine intra-Asia imports with its global export network to strengthen its advantages in the region.
Tim Smith, the chief executive officer for the North Asia region of the company, said it is very much linked to China's increasing imports as the country usually buys in raw materials or partly processed goods from other parts of Asia, before assembling and sending them for export.
"I think we have to put more focus on the import market than we have done. If you look at our organization design, it is mostly focused on servicing the export business. We have to step up, for example the number of sales people we have looking into the import market," he told China Daily.
Smith said the company also needed to look very carefully at the rotation of vessels because most designs were produced to ensure better export connections to principal destinations.
"The port rotation should be different because the ports for imports are not necessarily the same as the main ports for exports," he said.
Boosted by regional free trade development and strong growth, the intra-Asia sector will become the new focal point of the shipping market, said Bronson Hsieh, vice-group chairman of Evergreen Group and chairman of Evergreen Marine Corporation.
In 2009, intra-Asia cargo volume decreased 2.6 percent year-on-year. During the first half of this year, cargo volume increased 16.9 percent from the same period last year. The performance of both periods outstrips the long-haul markets from Asia to the United States and Europe.
Smith said he was very surprised by how quickly the industry has picked up from the global economic crisis despite some major economies still facing uncertainties over recovery, but the golden time of shipping has already gone.
"I was wishing the horrible downturn was going to end this time last year. We were optimistic that things were going to improve. But I think we've been surprised by how fast it's come good," he said.
According to the World Trade Organization, global trade growth will increase 13.5 percent this year, the biggest year-on-year increase since 1950, following a faster-than-expected recovery in trade flows. In 2009, world trade declined by 12 percent, the biggest slump since World War II.
After an historic loss of $2.1 billion in 2009, Maersk Line witnessed a dramatic upturn to a profit of nearly $2.3 billion in the first nine months this year, contributed to by a 34 percent year-on-year increase in average freight rates and a 7 percent increase in transported volume.
"The situation in 2010 is a little bit better than the normal level," said Smith, a 25-year veteran of the shipping industry. He described the business situation in 2010 as "strange" following unpredictable growth patterns quarter-on-quarter.
The second quarter this year saw strong growth followed by unexpected average growth in the third quarter, and a slight decrease in the fourth quarter, which is unusual due to the annual expected year-end seasonal demand, he said.
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