United Arab Shipping Company’s order for 10 mega-ships represents the first challenge to the market supremacy of major ocean carriers since Chinese lines, Coscon and China Shipping Container Lines, burst into the market in the late 1990s, according to Drewry shipping consultants.
The order for five 18,000 20-foot-equivalent unit ships and five 14,000 TEU vessels will propel UASC up the global rankings in a “startling” way, London-based Drewry said. The ships, which are due for delivery between late 2014 and mid-2015, will boost the Kuwait-based carrier’s end-2012 capacity by 60 percent and push it from the bottom of the Top 20 to the lower ranks of the Top 12.
The order confirms UASC intends to expand its presence on the Asia-to-Europe trade, although how it will be achieved “remains unclear,” Drewry noted.
Until UASC confirmed the contract last week, the Top 12 carriers appeared to be coasting toward even greater supremacy, with approximately 61 percent of vessel capacity already under their control toward the end of 2012. Maersk Line led the ranking with 14 percent of capacity, followed by Mediterranean Shipping Co. with 11.2 percent and CMA CGM with 7.5 percent.
The top carriers also control approximately 55 percent of all cellular capacity delivered or to be delivered this year, and at least 59 percent of capacity due for delivery in 2014. The Top 12 also have plans for further vessel upgrades from between 10,000 TEUs and 13,000 TEUs to between 14,000 TEUs and 18,000 TEUs, due to economies of scale.
Thus, the leading carriers “will not be sweating too much” over UASC’s order, Drewry said. The carrier only controlled 1.5 percent of capacity in October 2012 and will still control less than 2 percent at the end of 2014, when the first vessels are due for delivery. But the order does signify that the market is set to become more influenced by state-controlled carriers, such as Coscon, CSCL and APL. Other Asian carriers are also influenced by state interests through discrete soft loans, Drewry noted.