Maersk spins off intra-Americas service into independent company called "SeaLand"

Danish container shipping giant Maersk Line said today it has formed an independent company to serve intra-Americas shipping lanes and has baptized the company with one of the most storied—albeit long-defunct—names in maritime history.

Under the arrangement, Copenhagen-based Maersk, the world's largest container shipping concern, has spun off its intra-Americas services to an affiliate company called "SeaLand," which will launch operations on Jan. 1, 2015. The transition to SeaLand will be handled in phases throughout the year, Maersk said. The new company's personnel, headed by CEO Craig Mygatt, a long-time Maersk executive, will be in place by July 1, the liner said.

Maersk Line's existing intra-Americas network, which consists of 22 services, will be the foundation for SeaLand's ocean products, Maerk said. SeaLand will take over the management of those services and will be free to link up with other carriers to operate feeder sailings.

The new company's structure will be patterned after Maersk operations within Asia and within Europe, the liner said. The new company will serve mostly smaller customers whose needs are often different than those of large, multinational businesses. The objective, according to Maersk, is to provide a more geographically intimate level of service to these customers than they received from a global network not dedicated to their business.

"We heard from our customers that they value Maersk Line services, but they required greater service stability and commitment," Mygatt said in a statement.

Timothy R. Simpson, a Maersk spokesman, said smaller customers in the Americas "need an organization that is close to them and is reachable." Simpson said the worldwide Maersk operation hasn't been consistent in providing services within the Americas because "we hadn't figured out how to be the right carrier to everyone in this trade." Shippers and beneficial cargo owners (BCOs) will ultimately benefit by working with an independent entity that is local and focused on their needs, he said.

The "SeaLand" name comes from the shipping and containerization company Sea-Land Services, which was once one of the most well-known names in shipping and was acquired by Maersk in 1999. Maersk dropped the Sea-Land name altogether in 2006. According to Simpson, Mygatt decided to revive the brand after discovering on various trips abroad that customers associated him with Sea-Land rather than with Maersk.

The new company will be based in the United States, although a location has yet to be determined, Maersk said.

SEPARATE FROM P3
SeaLand's operations will have nothing to do with the proposed "P3" alliance, a vessel and port-sharing agreement between Maersk, CMA CGM Group, and Mediterranean Shipping Co. (MSC) that plans to operate on trade routes linking North America, Asia, and Europe.

The proposed alliance will give the three carriers control of about 43 percent of the Europe-Asia shipping market, 24 percent of the trans-Pacific, and 40 to 43 percent of the trans-Atlantic.

Regulators in the United States and Europe, which have investigated the alliance amid concerns of excessive market concentration and pricing power, appear ready to bless it. Asian regulators have yet to be heard from.