Deteriorating Competitiveness
Maersk showed stellar performance in the first half of this year to overwhelm its competitors in Korea. Concerns are rising over the possibility of a widening gap between the two.
According to industry sources, Maersk Line recorded a net profit of US$1 billion in H1 to post a growth rate of 43 percent from a year earlier. The Maersk Group adjusted its group-wide operating profit estimate for this year from US$4 billion to US$4.5 billion.
The rapid growth of Maersk is contrary to Korean shipping companies’ current status. For example, Hanjin Shipping and Hyundai Merchant Marine, the two largest in Korea, recorded operating losses of 33.2 billion won (US$32.7 million) and 105.1 billion won (US$103.6 million) in H1, respectively. In addition, Maersk achieved such growth while the freight charge per 40-foot equivalent unit (FEU) fell 7.7 percent year on year in the second quarter. This means Maersk dealt properly with the adverse conditions by dint of new large vessels with higher fuel efficiency and transport capacity.
The employment of new vessels by foreign shipping companies is a great concern for Korean players, since it could strike a blow in that the two groups share not a few major business areas in the Asia-Europe route. Korean companies are increasingly compelled to cut their charter costs significantly and raise the ratio of their own ships.