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Ocean carrier gains market share as rest of industry shrinks capacity
Mediterranean Shipping Co., the world's second-largest ocean carrier, is closing the gap on market leader Maersk, by rapidly expanding its fleet through the deepest slump in container shipping, while its rivals shrink their capacity.
"MSC has been the odd carrier out during the last 15 months, adding to both its total operated capacity and its working fleet," according to AXS-Alphaliner, a Paris-based consultant.
MSC's market share, based on the actual working fleet after excluding idled ships has risen from 10.4 percent at the start of 2008 to 11.5 percent on April 1, 2009, Alphaliner said.
During the same period, Copenhagen-based Maersk Line's share has fallen from 16.1 percent to 14.1 percent and third-ranked French carrier CMA CGM's share has slipped from 7.6 percent to 7.1 percent.
Geneva-based MSC has narrowed the gap with Maersk to just 2.6 percent in market share, or 340,000 TEUs in capacity -- the narrowest gap between the No. 1 and No. 2 carriers in the history of containerization.
In 2008, MSC's traffic rose 5 percent to reach 10.5 million TEUs, compared with Maersk's 13.8 million TEUs.
While many ocean carriers have been idling their owned ships and returning charter vessels when they come off hire, MSC has been adding capacity by chartering ships at "bargain" rates, Alphaliner says.
In the past six months, MSC has chartered a dozen ships of 2,500 to 6,000 TEUs for between 12 months and 24 months and fixed 10 other vessels for shorter periods.
MSC's fleet also has been boosted by the addition of three 14,000-TEU ships and four 11,660-TEU vessels, all to be deployed in its Far East-Europe "Silk" service.
"The carrier seems unaffected by the downturn and is for the moment receiving its large newbuildings on schedule," Alphaliner comments. MSC's order book includes a further 41 ships of more than 12,500-TEU capacity.
Most carriers are actively laying up idle capacity, led by APL, which has taken out of service 21 ships of 3,300 to 6,400 TEUs, representing 22 percent of its total capacity.
MSC, by contrast, has idled just two vessels.
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I would make one observation about MSC, and why it doesn't surprise me that the company continues to grow. In my career I have visited numerous container line offices, all around the U.S. and the world. Many are as quiet as a library. Others show evidence of human activity, but nothing overwhelming. MSC's office in New York City is completely different. It has the feel of a Wall Street trading floor. It is a frenzy of activity. Everyone is one the phone, dashing here and there or intently hunched over paperwork or hammering away at a keyboard. You feel the pace of the place the moment you walk in. As MSC grew from a tiny operator in the early 90s to the No. 2 global carrier, the image of this office and the contrast to more sedate environments elsewhere helps explain what is going on.
- By Peter Tirschwell on 4/23/09
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I do not agree with this comment/view...the way MSC works is simple - just dump rates irrespective of the need to do so or the market situation with little regard for market intelligence & thereby acquire market share! They arenot a global company even but have managed to be an international company by having separate, strange tie-ups/jv's with local companies in most parts of the world. Staff working in this environment have a very simple philosophy to follow - just kill the competition & drive up market share & in situations of a question raised by the head office, just quote the competition as Maersk or CMA, which is invariably enough for the staff in question to get the rates they need! Needless to say these guys would be offering these rates to their own forwarding companies & go on to buy big cars, homes with paltry salaries which isok to do until they are caught! It doesn't come as a surprise that these staff are alive & kicking compared to other carriers....