MSC Won! Changes in the Shipping Industry from the First Change in the Top in 29 Years.

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Today, I would like to talk about the theme, “MSC tops container shipping companies, overtaking Maersk for first time in 29 years.”

Daily Logistics Radio by IINO san in 11th Jan. 2022

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MSC Overtakes Maersk for First Place

Swiss shipping company MSC has overtaken Denmark’s Maersk, which had previously held the top spot, to become the top container shipping company for the first time since its inception.

According to Alphaliner’s ranking of container shipping companies in terms of scale of operations in January 6th,

MSC: 645 vessels, 4,284,728 TEU
Maersk: 738 vessels, 4,282,840 TEU

MSC slightly outperforms by just under 2,000 TEU, first time in 29 years that it has changed the top spot.

The ranking of container shipping companies is;

1st : MSC
2nd : Maersk
3rd : CMA-CGM
4th : COSCO
5th : Hapag-Lloyd
6th : ONE

As of January 1st last year, Maersk had 4.13 million TEU and MSC had 3.85 million TEU.

The article reports that MSC has increased its size by 11% for the full year of 2021.

Strategy of MSC

MSC has been buying used vessels to maintain its supply capacity, in the face of declining containership utilization rates due to port congestion and other factors in 2021.

In the past two years, the company has purchased more than 100 vessels, and five super-large 20,000 TEU vessels have been completed.

In addition, about 15,000 TEU from a Brazilian shipping company, which it decided to acquire at the end of last year, are expected to be added soon.

It is reported that the backlog of orders for new ships is less than 1 million TEU for MSC compared to 250,000 TEU for Maersk.

MSC is likely to maintain the top position for the time being.

Strategy of Maersk

On the other hand, Maersk has been strengthening its logistics business in recent years and decided to acquire Hong Kong logistics giant LF Logistics at the end of last year.

Maersk is concentrating its investment in the logistics sector, and the difference in strategy between the two companies is apparent in this change in leadership.

Personally, this article makes me feel that this is not the time to chase scale.

At present, shipping companies are booming and the more ships they have, the more money they can make.

However, it is also a risk for shipping companies to have too many ships, as before Corona, there was a surplus of space and sea freight rates plummeted.

Therefore, Maersk seems to be focusing on logistics to control the overall logistics.

Some time ago, there was a news story that Maersk was trying to get rid of Kühne & Nagel. There was also an article said that Kühne & Nagel, which purchased for USD4,000 at long-term rate, was selling for USD20,000 at the spot rate.

Changes in Shipping Industory

In today’s logistics industry, shipping companies and logistics companies are separated. While shipping companies can make a lot of money if they are successful, they also have risks.

On the other hand, logistics companies can choose the shipping company and do not need to own assets. Even if it has an asset, it can control the risk by using subcontractors to adjust the amount of supply.

In international logistics, there are often separate companies for each section, such as domestic trucking, customs clearance, ocean transport, warehousing and the last mile.

However, it is a trend that will become more seamless in the future with technology.

I think Maersk’s strategy is to use its huge funds to implement technology and keep total logistics in check.

The top logistics industry is undergoing a change in this way.

I think it is important to think about and anticipate industry movements based on this kind of information.