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4 THE JOURNAL OF COMMERCE Editor's Letter Chris Brooks IN A CONTAINER shipping industry relatively short of innovation, Maersk Line stands out as progressive. At no time has this been more evident than over the past five years: While the rest of the industry has been losing billions of dollars a year, Maersk has been making billions. But even the world's best can hit a slump, and no one can fend off the worst storms forever. The U.S. women's soccer team didn't get past the quarterfi nals in Rio, after win- ning the gold medal in the previous three Olympics. Tiger Woods' top- pling from golf's mantle has been even more dramatic. And so it is with Maersk, the world's largest container shipping company, which lost $151 million in this year's second quarter despite rising volumes and record low unit costs, compared with a $507 mil- lion profi t a year earlier. Swept up by brutally low rates across all trades — pricing dropped 24 percent in the quarter for the Danish company — Maersk fi nally joined the rest of the industry in the fi nancial bloodletting. But like a cornered animal, Maersk is most dangerous when, well, it's cornered, and it never sits pat. Indeed, parent company Maersk Group — now led by Soren Skou, the Maersk Line CEO who now holds that title for both — has been under- going a strategic review since July, when Skou took over for the ousted Nils Andersen. When the company at the fore- front of some of container shipping's most aggressive innovations — slow- steaming, the development of the mega-vessel, even the consolida- tion trend sweeping the industry today — undergoes a strategic review, everyone from service providers and intermediaries to shipper custom- ers had better take notice. Because whatever the result, it likely will be big, decisive and potentially mar- ket-altering. Speculation centers a round the sell-off of terminal-operating unit APM Terminals and logistics business Damco. And with Maersk having significant interests in the fl agging energy industry, divestiture of those divisions shouldn't be ruled out, either. Skou, for one, is laser-focused on controlling costs and building growth. A sale of one or more units would free up cash to invest when the market turns. Maersk, after all, has been an aggressive buyer (Sea- Land, P&O Nedlloyd, Safmarine) and seller (Maersk Air, its Odense shipyard, liquefied petroleum gas and very-large crude carriers) over the past 15-plus years, and there's no reason to expect that to change. The company and Skou, in par- ticular, have been tight-lipped about the review. "The board has asked me to look at the strategic options. We are not starting with a lot of 'do nots,' or areas where we don't want to go," Skou said in July. "We are looking at a full menu of options." But he's also determined to deliver growth. "In the long term, it's important that we have a group that is both profi table but also has a growth path," he told The Financial Times. And container shipping — Maersk Group's core business and its largest unit — is about as far from a growth path as it's ever been, though there are signs that it may be recovering as spot rates in the main east-west trades bounce off spring's rock-bot- tom levels. Perhaps the biggest sign that the industry is on the brink of recovery is Maersk hitting rock bottom itself. Come the end of September, expect the industry's most progressive com- pany to respond, and in a big way. JOC BEWARE a Wounded Maersk The Journal of Commerce (USPS 279 – 060), ISSN 1530-7557, September 5, 2016, Volume 17, Issue No. 18. The Journal of Commerce is published bi-weekly except the last week in December (printed 26 times per year) by JOC Group Inc. 2 Penn Plaza East, 12th Floor, Newark, N.J. 07105. Subscription price: $344 a year. Periodicals postage paid at Newark, N.J., and additional mailing offi ces. © All rights reserved. No portion of this publication may be copied or reprinted without written permission from the publisher. POSTMASTER: Please send address changes to The Journal of Commerce, Subscription Services Department, 2 Penn Plaza East, Floor 12, Newark, N.J. 07105-2257. SEPTEMBER 5.2016 EXECUTIVE EDITOR, THE JOURNAL OF COMMERCE AND JOC EVENTS Chris Brooks 973 776 7818 MANAGING EDITOR Barbara Wyker 973 776 7817 EXECUTIVE EDITOR, JOC.COM Mark Szakonyi 202 872 1234 SENIOR EDITORS Joseph Bonney, Breakbulk/Project Cargo, Gulf Coast 973 508 2417 William B. 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