Svitzer discussing collaboration with US-based competitor

Maersk-owned Svitzer does not - when asked by ShippingWatch - deny that the company is in talks with US-based Titan Salvage. The two players combined could create one of the world's biggest salvage and towage companies.

BY TOMAS KRISTIANSEN AND OLE ANDERSEN

Published: 12.12.14 at 08:19

Maersk's salvage and towage company Svitzer has initiated talks with US-based Titan Salvage, a move that could create the world's perhaps biggest salvage and towage company.

When asked directly, Svitzer declines to comment on the specific rumors concerning negotiations with Titan Salvage, reported by Tradewinds on Friday, but Svitzer says in an email to ShippingWatch that the industry has been characterized by historically low activity in recent years.

Svitzer lands three new mega-deals

"The result is that the industry is characterized by significant overcapacity and considerable costs, while our customers demand a comprehensive global state of readiness as well as the ability to handle bigger and far more complex tasks, with ships that are getting increasingly bigger," Svitzer tells ShippingWatch.

"Svitzer will always be ready to look at possibilities that could cement the company's position as market leader, but we decline to comment on rumors."

A merger of the two companies would combine Svitzer's global network with Titan's specialized expertise in wreck removal, a field that Svitzer has previously described to ShippingWatch as one of the key business areas going forward.

Titan Salvage, the US-based branch of Crowley Maritime Group, was chosen to serve as lead operator in the salvage of wrecked cruise ship Costa Concordia - one of the biggest and most complex salvage operations ever performed.

Svitzer has more than 400 tugboats and operates in 130 ports across the globe.

Robert Maersk Uggla

In an interview with ShippingWatch last spring, Svitzer CEO Robert Maersk Uggla stressed the importance of becoming competitive and profitable in Australia, Svitzer's key market.

Photo: Maersk

"In many ports in Europe and Australia, shipping companies, who sign up with our competitors, still assume that we have the capacity to support them if there are no other tugs available. Our competitor is typically running a smaller fleet at a much higher utilization with flexible and fewer crews, which gives them a significant cost advantage. So either we have to scale down or charge more for the safety net we today offer the ports and the ship owners," said Robert Maersk Uggla.

Svitzer's core business remains the traditional towage activities, where the company has a strong presence in Europe and Australia, though Svitzer is facing pressure from competitors in both regions. This includes specific ports in England and Australia where Svitzer, in Uggla's words, is quite simply not competitive.

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