Shock news in recent days from Copenhagen, where Maersk Line has reported a profit for Q3/15 of US$264 million, a figure which is down 61% from the US$685 million reported during the same period a year earlier.

Maersk Line revenue during the period was down nearly 15% to US$6 billion, while the line reported a decline in average freight rates of 19.3% to US$2,163/FEU.

Meanwhile, Maersk Group reported a profit for Q3/15 of US$778 million, down nearly 50% year-on-year.

Naturally, the line has confirmed cost-cutting plans to not only compensate for the financial downturn, but to adjust to what it believes will be short- and long-term market requirements. Maersk will reduce capacity and postpone investments in new capacity, while at the same time, reduce operating costs by pushing ahead with plans to simplify the company organization.

Annual sales and general and administration costs will be reduced by US$250 million with an impact of US$150 million in 2016, while Maersk Line’s shore-based workforce will be reduced by at least 4,000 people by the end of 2017.

As a response to the current market outlook, network capacity will be reduced in the fourth quarter of 2015 and throughout 2016. The closure of four services (ME5, AE9, AE3 and TA4) has already been initiated over the last two months, and there are plans to further cancel 35 sailings in the fourth quarter of this year.

Maersk will cancel plans to initiate options on a further six 19,630 TEU vessels and a further two 3,600 TEU feeder vessels. In addition, the line will postpone a decision on firming up an additional eight 14,000 TEU vessels.

Elsewhere, within the AP Moller group, port and terminal operator APM Terminals recorded a net operating profit of US$175 million for the third quarter of 2015 compared to US$345 for the same period last year. Revenue fell from US$1.1 billion to US$1.01 billion over the same period.

The number of containers handled by APM Terminals throughout its global network, declined by 8.7% to 8.9 million TEU from 9.7 million, partly due to the divestments of terminals in the US including Charleston, Jacksonville and Houston, as well as in North Europe at Terminal Porte Oceane in Le Havre.

By Paul Richardson

Sea Freight Correspondent | London