Maersk coy on freight hike effect in Panama

Robert Jan Van Trooijen, Maersk Line CEO for Latin America, did not quantify the percentage increase on freight rates for Panamanian exporters because they vary according to each customer. However, he said that Panama is a very important shipping market.

Jan Van Trooijen explained that the increase reflects the rising costs of fuel, steel and container terminals. He recalled that in the past five years, fuel has increased by 250%, while freight rates have dropped 10%.

“We have to recover the investments we are doing,” he added. In this regard, a press release from the shipping line notes that Latin America is strategically important to the company and is currently undergoing a process of investments for the period 2011-2013 amounting to $2,200 million.

When asked how important Latin America is in terms of container volume and profits for Maersk, the shipping company’s CEO for the region said that Maersk lost $600 million in the first quarter of this year and Latin America is part of the negative results. At the same time, he said the negative results are shared by all carriers operating in Latin America.

However, with respect to volume, the shipping company grew by 23% compared to last year. However, the cost of oil and operating costs do not make the operation profitable under existing market rates.

Jan Van Trooijen explained that currently the shipping company is working with a very low freight rate and the oil factor is very high. Under this situation, the shipping company took this action to recover losses.

Latin America remains vital to Maersk and the company says it has a plan for long-term investment for the region of about $8,300 million in port infrastructure, logistics, oil, and ocean activities.

According to Jan Van Trooijen, the Latin American market is taking advantage of globalization of markets, both import and export. Therefore, all customers benefit from a highly trusted, reliable and stable supply chain. He stressed that on the value of freight the final price is a very small percentage on the total cost of the products.

The shipping industry is losing money, since in recent years the cost of capital is higher than the return on investment, in the words of Robert Jan van Trooijen.