Consolidation activity has calmed down and many carriers are focused on boosting their positions through supply chain efficiency, digitalisation and a focus on customer service
Last year’s top 20 carrier table showed the impact of M&A activity in the sector. This year, consolidation activity has calmed down and many carriers are focused on boosting their positions through supply chain efficiency, digitalisation and a focus on customer service
Maersk is still the largest global container carrier, with a current fleet of 4.13M TEU and a 17.9% share of the world’s global container fleet. It is strengthening its business by transforming itself from a conglomerate to a global integrator of container logistics, providing customers with end-to-end supply chain solutions. This involves integrating its container, port and logistics businesses to operate as one company. According to Maersk’s 2018 ‘message from the CEO’, 2019 will be the “year of accelerating our transformation”. Steps to achieve this include: Damco’s Supply Chain Services (now known as Logistics & Services) and Maersk Line’s Ocean sector have become integrated, the integration of Hamburg Süd, and the separation of Maersk Oil and Maersk Tankers. Also key is customer experience and digitalisation. Maersk has become the first container shipping company to offer digital ocean customs clearance with the launch of an online platform. Maersk launched its Customs Clearance online shipping management platform in May 2019.
MSC is at number two, with a fleet of 3.4M TEU, taking up 14.7% of global fleet capacity. Its orderbook of 393,568 TEU (22 ships) is one of the largest orderbooks among the top carriers. Indeed, it is building 11 ships of 22,000 TEU, which will be delivered from this year onwards. The carrier announced last year that it will equip its newbuilds with 11 MAN B&W 11G95ME-C9.5 high-efficiency main engines. It is also jumbo-sizing 10 14,000-TEU ships to turn them into 17,000-TEU box ships. It is a leader in developing digitalisation after joining forces with Maersk, CMA CGM, Hapag-Lloyd and Ocean Network Express to establish the Digital Container Shipping Association, to pave the way for standardisation in the container shipping industry.
3 COSCO Group
COSCO Group has overtaken CMA CGM to move up from last year’s position of number four, to this year’s number three. It has a fleet of 2.9M TEU. Its change in position is due in large part to its acquisition of OOCL last year. COSCO has also enjoyed a vigorous newbuild delivery programme, with 16 vessels of a combined 285,316 TEU capacity delivered in the first nine months of last year. For 2019, it has 10 new vessels due to be delivered. Synergies between COSCO and OOIL’s middle and back desk functions such as cost control will be optimised and are expected to result in synergies in areas such as route networks, information systems, container fleets and supplier procurement. The acquisition will also lead to more comprehensive geographical coverage, and more flexible global capacity control. The company is boosting its end-to-end transportation solutions with the strengthening of its ‘Belt and Road’ strategy.
4 CMA CGM
CMA CGM might have been pushed down to number four by COSCO with its current fleet capacity of 2.7M TEU, but its newbuild orderbook is the largest of the top 20 carriers, with 450,088 TEU on order. This, of course, includes its nine dual-fuel 22,000-TEU mega newbuilds – the first ultra-large container ships to be fuelled by LNG. Indeed, according to VesselsValue, following CMA CGM’s order of 10 15,000-TEU ULCSs earlier this year, the operator has been catapulted into the top three largest ULCS owners, snatching second place from rival container owner MSC. This increases CMA CGM’s number of UCLSs on order to 19. CMA CGM currently owns 20 live ULCSs. Container trade routes are notoriously competitive for market share. The extra tonnage from CMA CGM increases the Ocean Alliance’s overall tonnage to 3.82M TEU, placing it comfortably ahead of 2M, with 3.33M TEU, and THE Alliance, whose companies own 2.15M TEU. CMA CGM has also expanded with its takeover of shortsea operator Containerships and its move this year to become the majority shareholder of Ceva Logistics.
Hapag-Lloyd is in fifth place with a fleet capacity of 1.7M TEU. It has no newbuilds on its orderbook at present. It has hit headlines recently, as its 15,000-TEU vessel Sajir will become the biggest container ship so far to retrofit dual-fuel LNG engines. Last year it launched its Strategy 2023, where it will focus on significantly improving quality for its customers, selective global growth and becoming profitable throughout the cycle. It will achieve this through key cost initiatives that focus on network optimisation, terminal partnering and further improvements in procurement and container steering. In addition, it has optimised revenue management to ensure that the most attractive cargo gets on board. There will be more investment in digitalisation and automation including increasing the share of the online business via the web channel to 15% of Hapag-Lloyd’s overall volume by 2023.
6 Ocean Network Express
The combining of NYK, K Line and MOL’s container ship businesses as Ocean Network Express (ONE) has pushed the Japanese trio to number six in the Alphaliner top 100 largest ocean carriers, with a fleet capacity of 1.5M TEU. It has had a slightly rocky time, but the signs are positive for the future. ONE “set sail in choppier waters than we had expected”, MOL president and chief executive Junichiro Ikeda said in his 2019 New Year message addressed to all officers and employees. He said that ONE – which combined the container operations of Japanese carriers MOL, NYK and K Line from April 2018 – did not reach its projected liftings due to disruptions in initial operations. He added “However, the cost savings derived from integrating the container ship operations have surpassed estimates before the integration. We also know exactly what must be done to improve cargo volume liftings and earnings. We will closely heed the lessons we have learned from ONE’s results to date as we fulfill our governance responsibilities as an investing company of this business venture.”
ONE: the cost savings derived from integrating the container ship operations have surpassed estimates before the integration
Evergreen is at number seven with a fleet capacity of 1.3M TEU. It also has a large orderbook, with 393,348 TEU due to be delivered. Its delivery programme incudes its 11 G-class 20,150-TEU megaships that started delivery last year and are due to be continued this year. Ordered from Japanese shipyard Imabari Group in October 2015, these are its largest ships. Taiwanese carrier Evergreen has stood strong in the face of consolidation within the container shipping industry, despite its smaller size compared to partners in the Ocean Alliance.
8 Yang Ming
Yang Ming is at number eight in the rankings with a fleet capacity of 645,738 TEU. It has a sizeable orderbook of 221,800 TEU. Yang Ming and Shoei Kisen Kaisha Ltd (Shoei Kisen) signed charter agreements for four 11,000-TEU container ships in April this year. The four new vessels will be delivered in 2022. Yang Ming said that to enhance the company’s mid- to long-term operational efficiency and competitiveness, it “continues its fleet optimisation plan”. In addition to these four container ships, in 2018 Yang Ming ordered another 10 11,000-TEU newbuildings through long-term charter agreements with owners Costamare and Shoei Kisen, which will give Yang Ming a total of 14 11,000-TEU newbuild container ships between 2020-2022. These eco-type newbuildings with modern designs will gradually replace some of Yang Ming’s high-cost, older ships. The carrier commented “With the new ships which will mitigate the pressure of high bunker prices and increased operating costs following the implementation of IMO 2020, Yang Ming will become more cost-competitive and environmentally friendly in the future.”
9 Hyundai Merchant Marine
Hyundai Merchant Marine (HMM) has a fleet capacity of 427,058 TEU. It has big ambitions to grow its fleet with 396,000 TEU (20 vessels) on its orderbook. In October last year it signed contracts for 20 eco-friendly box ships – which includes an order for the world’s largest box ships. Daewoo Shipuilding & Marine Engineering will build seven 23,000-TEU vessels, to be delivered in Q2 2020, while Samsung Heavy Industries will build five 23,000-TEU vessels, also to be delivered in Q2 2020. Finally, Hyundai Heavy Industries will build eight 15,000-TEU ships, slated for delivery in Q2 2021. HMM said the benefits of its shipbuilding programme include being able to secure stronger “fleet competitiveness with the benefit of economies of scale” and helping the carrier to “form a stable basis for making profits.”
PIL has a fleet of 380,636 TEU. It has recently completed a newbuilding programme that comprised 16 11,800-TEU box ships and has just one ship of 600 TEU on its orderbook. It has recently focused on using digitalisation to boost efficiency of the supply chain. This includes a successful trial of a blockchain-based electronic bill of lading (EBL) to track a shipment in real-time at the start of the year. Built on the enterprise-ready IBM blockchain platform, the trial saw an EBL used to track in real-time a shipment of approximately 108,000 mandarin oranges being imported to Singapore from China by Hupco in time for the lunar new year celebrations. PIL said using the EBL reduced the administrative time to transfer the title deed on the shipment to just one second from about a week.
ZIM has a fleet of 320,834 TEU, and currently has nothing on its orderbook. This is another carrier focused on digitalisation. It has recently joined the Digital Container Shipping Association and has announced a landmark in developing its blockchain-based paperless bills-of-lading technology, which enables all parties in a transaction to issue, transfer, endorse and manage documentation through a secure decentralised network. The first pilot of the project was announced in November 2017, carried out in co-operation with Hong Kong-based logistics technology firm Sparx Logistics and Israel-based blockchain company Wave Ltd. In the initial trial, containers were shipped by Sparx Logistics from China to Canada. On 14 January, ZIM announced two transactions had taken place in which original bills of lading were transferred to the receiver less than two hours after the vessels to which they related had departed – a significant improvement over the days or even weeks that the process can normally take. ZIM chief information officer Eyal Ben-Amram said “Having gained considerable experience with this revolutionary technology, we are now moving forward. It is part of our commitment to maximise digitalisation, and at the same time enhance our customer service levels and nurture customer relations.” ZIM now plans to roll out the technology across all of its customers in selected trades.
12 Wan Hai Lines
Wan Hai Lines has a fleet capacity of 277,122 TEU. In November last year Wan Hai signed contracts with shipyards for 20 box ships as part of its fleet improvement plan. Wan Hai Lines has confirmed an order of 20 container vessels with Japan Marine United Corporation (JMU) and Guangzhou Wenchong Shipyard Co/China Shipbuilding Trading Company (GWS/CSTC). The contract includes eight 3,036-TEU container vessels with JMU and 12 2,038-TEU container vessels with GWS/CSTC. The vessels will be delivered from October 2020 and January 2021 respectively. Wan Hai Lines operates a fleet of 72 owned vessels and 24 chartered vessels. It commented in a statement “This new shipbuilding contract is the company’s latest fleet renewal plan, so as to ensure that the company’s vessel fleet is able to remain competitive and support continuous market development. Eventually, the company hopes to deliver better service quality to its customers with a more efficient vessel fleet.”
Korea Marine Transport Co (KMTC) is an intra-Asia regional company, deploying regular container liner services to China, southeast Asia, southwest Asia, the Russian Federation and the Middle East. The company also owns and operates terminals in the port of Ulsan and Busan New Port. This carrier joined the top 20 last year due to the consolidation that has taken place within container shipping lines. Its position in the top 20 reflects the strength of the intra-Asia trade which is now similar in size to the Asia–Europe and transpacific deepsea trades. The carrier is benefiting from a mix of newbuilding and newbuilding charter tonnage – on its orderbook it has eight ships of a total 106,545 TEU.
Iran’s national shipping line IRISL Group arrived in the top 20 last year – propelled up the rankings due to the consolidation among some of the major carriers and after UASC, Hamburg Süd, NYK Line, MOL and K line disappeared as separate names. It was previously at number 24. It has been affected by political events as it is subject to US sanctions on Iran. US sanctions against Iran forced the carrier to give up its newbuilding programme. It placed an order with South Korean shipbuilder Hyundai Heavy Industries for four 14,500-TEU container ships in late 2016. These ships have now gone to new Shanghai-headquartered carrier Reach Shipping Lines, which has deployed the vessels on a new Far East-Colombo service.
15 Antong Holdings
Quanzhou Ansheng Shipping, a subsidiary of Chinese transportation company Antong Holdings, has risen up the ranks and is now at number 15, from its position in May last year of 16. Previous to 2018, it was at number 29. Container line mergers and acquisitions plus an aggressive newbuilding programme have propelled it up the ranks. Its fleet of 148,264 TEU is set to be boosted by 19 vessels of a total of 24,788 TEU it has on its orderbook.
16 Zhonggu Logistics Corp
Zhonggu was catapulted into the top 20 last year – it was at number 33 in April 2017. Its fleet of 137,513 TEU is larger than a year ago, when it consisted of 125,566 TEU capacity. This is due to delivery of newbuilds. The carrier still has 1,448 TEU on its orderbook.
17 X-Press Feeders Group
X-Press Feeders Group has slipped from its position of number 14 last year to 17 in May 2019. Its orderbook has 5,564 TEU, split between two ships. Its fleet of 125,514 TEU consists of 72% of chartered-in tonnage, which has enabled it to take advantage of some cheap daily hire charter rates and allowed it to be flexible. Dynamar’s Transhipment and Feedering 2018 - Trades and Operators - Ships and Hubs report describes X-Press Feeders as the world’s third largest and the single pure-feeder operator.
SITC has a fleet of 110,400 TEU capacity, bolstered by 22,00 TEU (nine ships) on its orderbook. The Chinese carrier’s orderbook has grown within the last 12 months, as in May last year it was 15,666 TEU.
19 TS Lines
TS Lines is a new entry into the top 20. The Taiwan carrier has a fleet capacity of 79,141 TEU and an orderbook of 8,000 TEU (six ships). TS Lines ordered four 1,800-TEU feeder vessels in 2015 and 2016 from CSBC shipyard and the owner booked another pair in 2018 for the same design with modifications to meet new regulations. These are currently being built.
20 SM Line Corp
This South Korean carrier was formed from the now-defunct Hanjin, with five ships coming from that carrier. SM Line’s parent company, Samra Midas Group, acquired the business operations of Hanjin’s Pacific and Asian routes. Concentrated on the northeast Asia-southeast Asia, Far East-India and transpacific routes, it has a fleet of 75,356 TEU.