The world's No. 1 container shipping firm has confirmed market talk that it has temporarily idled one of its largest vessels - yet another sign that the industry is in dire straits.
Maersk Line's "Morten Maersk" Triple E mega-ship - among the largest globally with a capacity of 18,000 standard containers - plys the Asia to North Europe route, calling at Singapore along the way.
The ship has been idle in the East China Sea off Shanghai since mid- October, owing to the Chinese Golden Week holiday, said the Copenhagen-based company. But it is expected to resume service in Busan, South Korea, next month.
Chief operating officer Soren Toft told a briefing yesterday that Maersk Line expects its deployed capacity to remain "more or less flat" through next year, amid tepid market conditions.
He noted the company's average freight rates have fallen 1.9 per cent each year since 2004, and said this "slow erosion" in rates will likely continue due to the severe imbalance in global supply and demand. "We're taking the starting point that there will still be tough competition," he said.
Mr Toft acknowledged the industry is "in need of consolidation - to the extent that if it makes sense for us to participate, we will do so".
But he declined to comment on whether AP Moeller-Maersk, Maersk Line's parent company, has indeed dropped out of talks with Singapore's Neptune Orient Lines (NOL) over a potential acquisition.
NOL earlier this month announced it was in separate talks with AP Moeller-Maersk and France's CMA CGM on a possible buyout, before saying last weekend that it was in exclusive talks with CMA CGM, the world's No. 3 shipping container line.
Maersk continues to be on the lookout for acquisition opportunities, however. "There are still many trades where we are underweight, where our market share is relatively low," Mr Toft said, citing the West Coast in the United States as well as intra-Asia lanes.
"Certainly there are lots of possibilities, but it's about deriving synergies out of acquisitions, not about a mindless pursuit of just acquiring. There needs to be a rationale and a business case."
Maersk this month announced plans to reduce its network capacity and postpone investments in new capacity to cope with the worst slump in the industry since the financial crisis in 2009.
It also said it will cut 4,000 jobs from its land-based staff of 23,000 by 2017.
But Mr Toft yesterday said there will be "very little to no impact" on its presence and staff in Singapore, besides a reshuffling of its headquarters' functions to create a leaner organisation.