ONE – looking like Maersk/PONL merger

ONE Line just revised their profit outlook downwards from a positive 110M USD to a negative 600M USD for fiscal year 2018. Not only is this a very dramatic adjustment, but it also appears to bear a strong resemblance to the integration between Maersk and P&O Nedlloyd in 2006.

Amongst the explanations for the adjustment, ONE states the following: “Booking reception and documentation operations were delayed because ONE staff were not completely familiarized with the newly introduced IT system, and the staff were shorthanded. This caused significant inconvenience for customers. “

Compare this with the following statement made by Maersk in their annual accounts for 2006: “Volumes did not reach expectations. Maersk Line lost market shares. This was primarily due to difficulties related to the implementation of a number of comprehensive IT systems simultaneously with integration of P&O Nedlloyd, including the merger of the global service network “

ONE’s current fleet size is 1,5 million TEU and they project a loss of 600M USD. In 2006, Maersk Line had a fleet size of 1,6 million TEU and suffered a loss of 568M USD. The similarity is striking. (but also note that Maersk did eventually bounce back and emerge stronger than ever - therefore ONE's current problems might also be temporary)

ONE states that the problems are resolved, but the effects in terms of getting booking levels back up takes time.

This means that ONE is being hit by a double-whammy. They will be faced with the same problems as the rest of the industry wherein fuel price increases are difficult to fully pass on. At the same time they will have missed out on the strongest peak in many years on the Transpacific eastbound trade.

This is of course all very unfortunate for ONE line, but it also raises another important point. If ONE is indeed successful in regaining the lost ground this means challenges for some of the other carriers. Other carriers will have experienced stronger than expected volume growth in 2018, capitalizing on ONE’s losses. That is only natural. But it similarly means that if ONE is able to regain “their” volumes, it will negatively impact other carriers in 2019.