Maersk strengthens Asia-South America offer

Surging Chinese demand for Brazilian chicken and other perishables coupled with burgeoning demand in South America for Asian consumer products has led Maersk Line to strengthen its services between the two regions with a fleet of bigger-box ships. Soren Karas, head of South China for Maersk Line, said delivery of the 7,500 teu (20-foot equivalent unit) ships began this year and all the ships would arrive by 2013.

Maersk Line placed an order, worth about US$2.4 billion, according to shipping industry sources, for 16 of the ships with South Korean shipbuilder Daewoo Shipbuilding and Marine Engineering in 2008.

Around 10 of the vessels, including Maersk Lebu which is about to be delivered by the shipbuilder, will fly Hong Kong's Bauhinia flag and are among 22 ships Maersk plans to register in Hong Kong that will take its total tonnage on the Hong Kong shipping register to about 2 million gross tonnes. The remaining six ships will be registered in Singapore.

'The ships have been custom-made for South American routes,' Karas said. The vessels are twice the size of the Panamax container ships that previously served the trade. 'They are shorter and wider, but have the draft of a Panamax ship' which allows the vessels access to draft restricted ports in South America.

The ships also have 1,700 plugs for refrigerated containers, about double the number of electric connections a comparable container ship was likely to have installed. Karas said this reflected the larger volume of refrigerated cargo the ships were to carry plus the anticipated rise in the volume of poultry, meat, vegetables and fruit that Maersk Line expected to carry from South America to Asia.

Karas said the refrigerated cargo trade from South America was 'definitely a market that is growing'.

He pointed out that container volumes between Asia and Latin America were growing at about 20 per cent per year, compared with an average of 6 to 7 per cent for container volumes globally. Similar growth levels on the Asia-Latin America route are forecast for at least the next five years.

On poultry exports alone, the Brazilian Poultry Union said exports to Asia climbed 6.9 per cent between 2009 and 2010, but exports to China soared 406.6 per cent from 23.9 tonnes in 2009 to 121.5 tonnes last year and rose 25.5 per cent to 386.5 tonnes to Japan last year.

The increase more than offsets a decline in other Asian markets, including Hong Kong, where Brazilian poultry imports dropped 22.6 per cent to 331.5 tonnes. South American farmers' keen interest in Asian markets was also reflected in the big presence of South American farmers and marketing associations at the Asia Fruit Logistica exhibition and congress in Hong Kong last September. Caputto, one of the largest citrus producers in Uruguay, has already established markets in Indonesia and the Philippines, but the company is keen to develop markets in Hong Kong, China and Malaysia, particularly for its oranges. South America is also a big producer of blueberries, cranberries, garlic and cherries.

Karas added the ships were expected to be full from Asia to South America carrying consumer goods and small bulk commodities. The return leg would carry exports including perishables products, plus empty containers to reflect the current trade imbalance as South America imported more than it exported to Asia.

Karas said the Asia-South America trade was 'definitely a market we are very excited about' while Maersk was also considering deploying some of its new 7,500 teu vessels on the routes between South America and Europe. The carrier operates two Asia-South America services, which include port calls at Shanghai, Yantian, Hong Kong, Singapore, Buenos Aires and Montevideo