Top 40 Container Carriers

Several factors, including mega-ships deployed, North Asia congestion, rising bunker fuel prices, and the impact of Trump administration tariffs, are compromising schedule integrity in the trans-Pacific.

CMA CGM believes expanding into land routes with supply chain services is the key to maintaining growth following the consolidation of the container shipping market.

Having filled staff shortages at its US call centers and improved data integrity, the new Japanese liner company Ocean Network Express is providing beneficial cargo owners with the level of service they rightfully demand, but CEO Jeremy Nixon said carriers will struggle to implement meaningful peak-season surcharges this fall.

This is known: in less than 18 months, the container shipping industry will be hit with a massive annual operating bill in the billions of dollars. What is less known is how the costs will be passed along to shippers, and how ocean carriers will adjust, both in terms of capital investment and operations.

Shippers using the BoxTech database to track container weight and other information will get greater reach through the database, which now contains information on 40 percent of the world’s containers after Mediterranean Shipping Co. added its information.

Ocean carriers’ fixed costs rose in the first quarter, and surcharges ensued. However, the hikes occur even as the surplus capacity issue lingers, prompting debate regarding whether carriers can maintain the surcharges.

Rodolphe Saadé, group CEO of CMA CGM, announced the surcharge along with first-quarter results, which saw revenue surge. Despite that increase in demand, fuel costs resulted in a $77-million net loss for the quarter.

However, freight forwarders and shippers said they did not expect the disappearance of two carrier’s trans-Atlantic services to have much impact on capacity on the United States-Northern Europe route.

Amid what the company called challenging market conditions, Maersk’s CEO said the first-quarter performance was “unsatisfactory," but the report was not without its positives; the company underscored that it has implemented initiatives to improve profitability and reiterated its 2018 earnings guidance.

Higher costs have weighed on results, slightly offsetting the positive impact of stronger volumes. Still, a key CEO offered an encouraging evaluation regarding the second half of 2018.

Absent a profit motive, subsidized ocean carriers have at times been less rigorous in knowing and managing their costs and innovating. However, for several reasons, the subsidized model is not likely to end anytime soon.

Annual service contract negotiations between US importers from Asia and ocean carriers are moving slower than in past cycles. Beneficial cargo owners are holding out for lower rates, to offset rising supply chain costs elsewhere, but they may be disappointed by their efforts.

Terminal operators, in a desire to control global end-to-end container logistics, are mirroring a strategy being employed by container lines.

The April 1 launch of new carrier Ocean Network Express is experiencing booking delays in some jurisdictions as cargo from three carriers migrates to the new network.

Cosco Shipping Holdings, China's largest shipping company, has continued to aggressively expand into landside logistics, building on Beijing’s Belt and Road strategy to grow its terminal and inland footprint in Asia and Europe.

The heads of the IBM/Maersk joint venture said 24 companies are being onboarded with roughly 70 more in the pipeline, and are seeking to allay forwarders’ fears that the initiative is encroaching on their end-to-end supply chain services.

US truck capacity pressure, exacerbated by the federal electronic logging device mandate, is trickling down to all modes of inland cargo transportation: railroad, drayage, and transloading and long-haul truckload. Ocean carriers are responding with a mixture of actions.

The 2M Alliance will adjust its Asia-Europe network, losing many direct calls in a revamp aimed at improving reliability.

CMA CGM wants “to be more than a price tag” and to that end will roll out insurance, trade finance, and technology and digitization efforts to make the carrier more responsive to shipper needs.

Tim Smith has relinquished his position as the Beijing-based chairman of Maersk China and chief representative of Maersk Group in north Asia and will take up his new role with APM Terminals on 1 March.

HMM says mega-ships will be ordered in the first half of 2018 but provided no info on the number of vessels or their sizes.

Analysts are trying to figure out HMM's growth plans, with the South Korean carrier widely expected to place its mega-ship order.

After a year off, Hyundai Merchant Marine is about to get back into Asia-Europe, but not with the size ships that are traditionally deployed on the trade.

Based on carrier statistics compiled by PIERS, a JOC.com sister company, if the container volumes compiled last year by the China-based carriers were combined, Cosco and OOCL would have ranked fourth among all lines in the US trades in overall container volume and first in imports.

“Carriers face an increasing threat from digital attackers,” — competitors that have embraced technology, a Boston Consulting Group report released Friday argues.

Hamburg Süd has withdrawn from a vessel-sharing agreement on the Asia-west coast of South America routes and will offer new services on the fast-growing trade.

Cosco is heading for a solid 2017 profit, turning around a $1.4 billion loss, with Beijing subsidies lending a helping hand.

A new schedule outlined by Mediterranean Shipping Co. will substantially cut the time needed to send cargo from Europe to the US East Coast.

The mega-ships continue to flood in to the Asia-North Europe container trade lane.

Hong Kong-listed OOCL, soon to be part of Cosco, reported a massive increase in container volume and revenue for 2017.

Importers are shipping with a sense of urgency to bring their merchandise into the United States before factories in Asia close down for the Lunar New Year celebrations on Feb 16.

CMA CGM is strengthening its presence on the east coast of South America.

Qatar Ports is implementing a “comprehensive plan” to expand the network of direct shipping calls to Hamad port.

IBM and Maersk estimate the initiatives could save the industry billions of dollars.

When OOCL is part of Cosco and the three Japanese lines merge soon, most of the container ship capacity will be concentrated in just a few hands.

The orders come after Cosco and Yang Ming delayed delivery of roughly 200,000 TEU of capacity to 2019 amid signs overcapacity remains in the market.

Maersk initially set up the program for its own needs and used it to, for example, monitor the temperature of each box and change it if it was too low or high, and also to track the maintenance needs.

In a recent interview, Soo Cheon Lee, co-founder and chief investment officer at investment bank SC Lowy, said SM Line would have to find partners on the trans-Pacific if it was to maintain its competitive edge.

As capacity floods into service, some carriers have started to delay the delivery of new mega-ships.

Carriers have little track record of self-policing in pursuit of overall industry gains. Can carriers change their operational stance?