Shipping line results seem to be improving, but is this a general trend, or purely limited to a few? After Maersk and CMA CGM posted positive figures for the third quarter, that question arose. So first FTW decided to ask Jonathan Horn, MD Southern Africa at Maersk Line, one of the winners, whether they are exceptions – or is this the way things are moving? “It is far too early to call an end to the challenging environment that the industry has found itself in over the past several years,” he said. “Global recovery in the economic fortunes of the major economies of the world, and indeed inf luential emerging economies such as the BRICS (a trade group of the emerging economies of Brazil, Russia, China and our own SA), is somewhat subdued and still has some way to go.” Horn also noted that gross domestic product (GDP) growth was a strong purveyor of levels of container trade. “In this context,” he added, “global capacity remains abundant compared to demand – with global demand growth in 2014 expected to only be in the 3-5% range.” Horn also highlighted that freight rates too were on a long-term declining trend. Given this, he pointed out that a major factor in a drive to get the bottom line well into the black would be effective cost-cutting, rather than increased income. And he felt that the Maersk Group had proved this in its own strategic approach this year. “In this challenging environment,” Horn said, “we have continued to drive hard at continuously improving our efficiencies, strongly focusing on taking cost out of all areas in our business." Putting the same question before Glenn Delve, SA marketing director of MSC, his reaction was equally noncommittal. “Some are now turning to profit,” he told FTW, “but some still have challenges. “You’ve got to accept that things are turning around a bit – but don’t be deluded into thinking that it’s over. Next year will still be a challenge for all the lines.” INSERT & CAPTION A major factor in a drive to get the bottom line well into the black would be effective cost-cutting rather than increased income. – Jonathan Horn CAPTION Slight turnaround for shipping lines... but 2015 will still be a challenge.
