AP Moller-Maersk chairman Robert Maersk Uggla has spoken out against criticism of the container ship industry from leaders such as US President Joe Biden.
Speaking to graduates of the Massachusetts Maritime Academy’s class of 2022 over the weekend, the Danish chief executive of AP Moller Holding said: “Lately, some leaders have given the impression that shipping lines are to be blamed for the challenges, delays and costs we are witnessing with transported goods.”
“Let me be blunt, there are plenty of ships on the water and plenty of shipping lines at hand,” he added.
Biden was quoted as saying earlier in June that record profits earned by liner operators amid rising consumer prices made him “viscerally angry — like if you had the person in front of you, you want to pop them”.
He has now signed the Ocean Shipping Reform Act into law, although it is much-maligned in the liner sector.
The new rules give the Federal Maritime Commission power to initiate investigations into the practices of shipping companies on its own, force liner operators to establish service standards, outlaw unreasonable refusals to carry US goods and forces carriers to justify detention and demurrage charges.
But Uggla said the blame for supply chain problems lies elsewhere.
He pointed out that container import volumes to the US are up 35% compared to pre-Covid levels, partly driven by a big stimulus programme.
Carriers have responded by moving massive amounts of capacity into the Pacific, he said.
In Maersk’s case, the group now has 50% more teu there than before the pandemic.
Not working hard enough?
“However, the quality and cost of a transportation network is a function of how all parts of the network operate. The onshore capacity has not been able to scale in the last two years,” Uggla added.
The chairman revealed that, for long periods, Maersk has not been able to operate all of its cranes at Pier 400 outside Los Angeles.
“And many US ports, I am afraid to say, contrary to many ports in Europe and Asia, still don’t operate 24/7. Also the lack of truckers and limited rail capacity have created congestion,” Uggla said.
“We experience challenges of similar nature in other countries as well. The net effect is that around 10% of the global container ship capacity is waiting outside ports,” he added.
The Maersk man stressed that everyone working on a ship or in a port, in a warehouse and in other parts of the supply chain, is connected and dependent on each other, across different countries.
“There is only one solution — to work closely together. And in this respect, the global supply chain mirrors the world. When we work together, across communities and across borders, tackling profound challenges such as climate change or the supply chain disruptions of food, we end up with better outcomes,” Uggla concluded.