Viking spirit on today's sea lanes

By DANIEL RIORDAN

In the days of the longboat, Viking raiders did most of their restructuring with sword, axe and fire.

The style of Danish-based Maersk Sealand's 3 1/2-year raid on local shipping may have been more civilised, but that has not lessened its impact.

The entry to the local market of the world's biggest shipping line forced competitors to raise standards and lower prices.

That pressure will continue, even after managing director Jens Madsen, who established the operation, transfers to the head office in Copenhagen.

Mr Madsen leaves in two weeks to run the company's global reefer (refrigerated container) business.

Although he says he is reluctant to talk about the value Maersk has added to the market here, he acknowledges things have changed for the better since the company's arrival.

"I think we've added to the industry here. We've given it a greater choice, a better and more reliable service."

The company's first splash was its introduction of fixed-day service to ports, giving customers greater certainty. Competitors in the shipping conferences (cartels) were forced to follow suit.

Maersk began with two ships calling fortnightly at four ports - Auckland, Tauranga, Napier and Lyttelton - and now has four new container ships calling weekly at seven ports, including Timaru, Port Chalmers and Nelson.

The new ships, worth $220 million, were built for Maersk in Taiwan, with the fourth, the Nicoline Maersk, named yesterday in a ritzy ceremony on Auckland's waterfront.

The company uses Singapore as its hub, transferring cargo to much bigger ships for movement east and west.

Mr Madsen said customers were at first concerned by the added risks transhipment posed but their fears were soon allayed.

The company also introduced the 40-foot (12.1m) high-cube reefer container to the market here, bringing significant cost savings and efficiencies to major exporters.

The company is understood to enjoy about a 25 per cent market share on the routes it services, which do not include the Tasman and the Pacific Islands.

Maersk may ply the transtasman route later, but would require more ships.

Industry sources suggest Maersk is talking to its Australian counterpart about shipping jointly to new Northern Hemisphere markets, but Mr Madsen declined to comment.

Mr Madsen said rates have dropped since Maersk entered the market. "But I wouldn't claim that's all our doing."

He said exporters were also choosing their shipping partners on different criteria. "Three to four years ago exporters tended to go for whatever was cheapest. Now it's a combination, looking at what they get for their money, realising that how they ship their product is a very important part of their own service."

Asked if Maersk would consider buying into ports and terminals here as it has done in other countries, Mr Madsen said New Zealand's political climate mitigated against it.

"It will all be down to synergies and profitability, but I can't see it happening."

He said the most striking feature in New Zealand was the number of ports. "It's great for us but it's quite amazing that you have 10 or 11 container ports. In Japan, you would have four or five."

Rationalisation was inevitable.

He said New Zealand ports in general provided a good quality service.

"The bottom line for a shipowner is to see his ship getting in and out of a port on to the high seas as soon as possible. Most of the ports here are very customer-oriented."

All of them?

"One or two ports are not. They're a little bit antiquated.

"I think we have been fortunate because the industry when we got here was in some confusion. It wasn't too difficult to come in and make a difference."

Maersk employs about 55 staff, centred on Auckland, in what Mr Madsen describes as a lean organisation.

The company's revenue has tripled from its first year.

Mr Madsen joined Maersk 23 years ago, but has spent the last 18 years outside Denmark, in Ireland, Japan, the United States, Vietnam and the Ukraine.

"I feel that in years to come as I look back, New Zealand will be the icing on the cake. We started out from scratch. The first year in particular was difficult. We arrived here in early November and three months later we had the first ship coming."

His replacement is Flemming Gamst, from Maersk in Singapore.