Maersk Line Quits 10 Chinese Ports

Maersk Line, the world's biggest container shipping company, has decided to stop services to and from 10 ports in China as part of a drive to reduce costs.

Maersk Line, a unit of Danish conglomerate A. P. Moller-Maersk, has, like other container shipping companies, been hit by historically low freight rates in the first half of this year due to a slowdown in global growth and many new, larger vessels being added to the market.

Maersk Line said it would stop serving ports in Chizhou, Luzhou, Yingkou, Jinzhou, Rizhao, Yueyang, Lijiao, Taiping, Jiaoxin and Nansha old port.

The ports are currently served by feeder vessels that move goods to larger ports where mega-vessels with capacity of up to 20,000 TEU take over and transport the goods to ports mostly in Europe and the United States.

Maersk Line said in a statement it would focus on ports that offered the best growth prospects and opportunities for its customers.

"The closure of service in these Chinese ports should not be interpreted as a change of strategy," Maersk Line wrote in an email to Reuters, declining to give further comments.

Maersk Line is currently represented in 41 locations in China, which has been recognized as the world's factory since the late 1970s. In recent years, Chinese growth has slowed.

A.P. Moller-Maersk reported a sharp decline in quarterly profit and its new chief executive confirmed that earnings would fall this year.

The company fired its CEO in June and replaced him with Soren Skou, head of its Maersk Line container business, indicating it could split it into separate companies and sell off part of the group, including its oil division.

Skou, a company veteran who has to respond to a shipping industry recession and tough oil markets, is expected to present the results of a strategy review in late September.

The group is fighting to remain the world's largest container shipping carrier as a wave of mergers and acquisitions, particularly in Asia, creates new challengers.