Maersk chief executive Soren Skou says the world's largest shipping company is "out of the market" for further deals this year for rival liner operators. He says the $4bn takeover of Germany's Hamburg Sud will take precedence.
Skou made the remarks during a Bloomberg TV interview at the Davos World Economic Forum. Skou says consolidation in the containership sector last year was a shock even to him. Sixteen major container lines were operating at the start of last year, but seven of those were absorbed into other carriers by the end of 2016.
"We were all very surprised by how much the sector actually consolidated last year," Skou said.
Skou played a role in that consolidation through Maersk's deal to buy Hamburg Sud. He says the deal should get regulatory clearance by the end of this year. Until that occurs, though, Skou says Maersk will not be making further consolidation moves.
"We have to absorb the Sud acquisition before we can do anything else," Skou said. "Maersk is out of market."
Plenty of idle capacity
The consolidation wave and the exit of Hanjin Shipping have helped turn around a nearly two-year downward cycle in container rates. Skou says a "global price war" among the container lines started back in March 2015, with rates bottoming out last March. Since last September, rates have been on stronger upward trend
Skou expects "a little bit of demand growth" relative to what the industry saw last year. But he says the direction of rates can easily turn if the boxship operators decide to put more vessels back into trading.
"What really will matter is how carriers deploy capacity," Skou said. "There is plenty of idle capacity. If you want to deploy more you can easily do that."
Maersk Energy IPO likely
Skou's other big initiative has been slimming down Maersk through spin-offs of its terminal and energy businesses. What will happen with oil-and-gas business Maersk Energy is still uncertain, but Skou says a public offering "is more likely" than not.
"We want to make sure we separate the businesses out in order to create most value for our shareholders," Skou said. "We are looking at all the options."
Trump effect uncertain
Skou says there are too many unknowns for the shipping industry with regard to US president-elect Donald Trump. He says there are "mixed messages" coming out of the US right now with regard to trade policy. They could either bode well or ill for shipping depending on what's actually done.
"The new administration wants to both lower taxes and invest in infrastructure, which would be good for trade," Skou said. "Of course there's all this talk about renegotiating trade agreements which will probably have a negative effect."
Skou says he is "absolutely a believer in trade" due to the overall wealth creation for the world population. Although he says it's unlikely to happen, a US trade war with China would be "very bad news indeed for anyone in any kind of global trade-related business."
