You could hardly ask for a clearer example of long-termist stakeholder capitalism than the one that just came out of the Maersk shipping line. The family-controlled shipping conglomerate’s CEO Søren Skou has said that the business he runs would happily settle to make less profit, if it means that its rivals stay in business.
Yes, you read that right. “It is a concern that the industry as a whole is not profitable,” mused Skou, according to the Financial Times. He added: “We need as an industry to be able to fulfil our role in the world of facilitating global trade and providing services at a low cost. It is a concern that prices are so low that a big number of carriers are unable to make a profit and enough cash to replace assets.”
It would be easy for Maersk to gloat. While much of the industry is struggling, the fourth-generation family-controlled Danish firm, which was founded in 1904, is expected to make a profit of $2bn this year, seeing good returns from its huge Triple E ships, which are the world’s biggest. It has also cut costs by making its fleet sail a little slower, thus using less fuel.
Its success is in contrast to most of its rivals, who invested heavily in fresh capacity after 2008 when it was cheap to build ships, betting that global trade would recover. Many are still waiting for that bet to pay off, and overcapacity means that prices are low. Ten of the 13 next-biggest shipping firms either made a loss or broke even in the first half of this year.
Skou added: “For Maersk Line it is advantageous to be in a position where we are growing better than the industry. But we would rather live with a lower margin gap and a higher average profitability.”
Of course, it doesn’t help Maersk if its rivals start going bust, because that would make people think that the era of global trade is at an end, which wouldn’t be great for business. But the firm evidently has a broader view of capitalism than one that wants to grind its rivals into the dust.
When you even see the competition as partners in the joint enterprise of enabling global capitalism, you can certainly be said to be taking the long view. If they have to make less than $2bn profit a year, then it appears that’s a sacrifice they are willing to make.