We look at the world’s largest shippers, tracking new entrants, those that have slipped down the chart, those that have stayed put, and why
Maersk is still the largest global container carrier with a current fleet of 4.16M TEU and a 17.6% share of the world’s global container fleet. It improved earnings and free cash flow in 2019 despite weaker market conditions and global container growth of only 1.4%.
“Despite weaker market conditions, AP Moller-Maersk was able to improve profitability and cash flow. Our cash return was healthy, and we continued reducing net interest-bearing debt, leading to a further deleveraging of US$3.3Bn over the year. It gives us a solid starting point for 2020 to further expand our end-to-end offering within container logistics while at the same time managing market challenges,” says AP Moller–Maersk chief executive Søren Skou.
The strategic focus in 2019 was on improving the financial performance of Ocean and creating a better customer experience through increased reliability, improved customer experience and introducing online services and products such as Maersk Spot, a product that offers price and loading guarantee. Synergies harvested from the Hamburg Süd acquisition and integrating transport and logistics reached US$1.2Bn, above the expected target. Maersk is also at the forefront when it comes to alternative energy developments; it is planning to trial a battery system on board Maersk Cape Town to improve vessel performance and reliability while reducing CO2 emissions.
MSC is at number two with a fleet of 3.8M TEU, taking up 16.1% of the global fleet capacity. This has grown from 14.7% and a fleet of 3.4M TEU in April 2019 as it started receiving its 11 new 23,000+ TEU ships last year. MSC Gülsün was delivered last year and deliveries will continue this year. Its orderbook consists of 12 ships at a total of 202,500 TEU.
Built at the Samsung Heavy Industries (SHI) Geoje shipyard in South Korea, MSC says “MSC Gülsün sets a new standard in container shipping, in particular in terms of environmental performance.”
At 400 m long and more than 60 m wide, MSC Gülsün has a record capacity for a container ship: 23,756 TEU. MSC says this new class has been designed with a wide range of environmental, efficiency, stability and safety matters in mind. MSC Gülsün’s improved energy efficiency and fuel economy ensure MSC is on track to meet international 2030 environmental policy targets set by IMO ahead of time, building on a 13% improvement in CO2 emissions per tonne of cargo moved already achieved across the MSC fleet between 2015 and 2018.
COSCO Group last year overtook CMA CGM to move from number four to number three, where it remains. It has a fleet of 2.9M TEU. Its change in position is due in large part to its acquisition of OOCL in 2018. COSCO has also enjoyed a vigorous newbuild delivery programme and has five vessels of a combined 115,000 TEU capacity on its orderbook.
OOCL signed newbuilding contracts with shipyards Nantong COSCO KHI Ship Engineering Co and Dalian COSCO KHI Ship Engineering Co for five new container vessels, with a nominal capacity of 23,000 TEU. Delivery of these vessels is expected to start in 2023. OOCL says “These five newbuildings are part of our ongoing programme to introduce large, modern and fuel-efficient vessels to further strengthen our fleet competitiveness. They will allow us to rebalance our fleet by increasing the proportion of the ships we own in the core fleet, while some vessels leased under long-term charters will be returned to the owners.” OOCL says in its statement for its 2019 financial results that it enjoyed “significant synergy benefits” in 2019 from its acquisition by COSCO Shipping.
4 CMA CGM
CMA CGM has a fleet capacity of 2.6M TEU, and its newbuild orderbook is the second largest of the top 20 carriers, with 466,988 TEU on order. This includes nine dual-fuel 22,000-TEU mega newbuilds – the first ultra-large container ships to be fuelled by LNG.
These will start being delivered this year. CMA CGM has also expanded with its takeover of shortsea operator Containerships and its move to become the majority shareholder of Ceva Logistics. It is focusing on a customer-centric strategy; as part of this in March 2020 it launched Seapriority Go, a new solution that guarantees priority transportation of goods.
The high value-added service offers priority boarding for goods during the loading process and provides customers with exclusive treatment: their goods will be given priority whether it be for container allocation or loading on board. This new product is part of the CMA CGM+ products umbrella: a package of 17 high value-added services tailored to specific needs of customers.
Hapag-Lloyd is in fifth place with a fleet capacity of 1.76M TEU. It has no newbuilds on its orderbook at present. Its 15,000-TEU vessel Sajir will become the biggest container ship so far to retrofit dual-fuel LNG engines. This will pave the way for other container ship operators to carry out such a retrofit or at the very least, make new vessels LNG-ready.
While Hapag-Lloyd is likely to pay a higher cost for retrofit work on Sajir because it is first of its kind, any further retrofits will be cheaper a result of this work. Hapag-Lloyd launched its Strategy 2023 in 2018, where it will focus on 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. 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
Combining 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.
After a bumpy start, ONE has overcome teething problems, says K Line president and chief executive Yukikazu Myochin in his New Year message. He says “Having overcome the teething problems of operation, ONE is now at the stage where it can achieve more synergy through best practices and expect further improvements in meeting the bottom line.” Looking back on 2019, he says “effort and execution” was made in driving a turnaround of ONE, recovering the fleet’s cost competitiveness through structural reforms and improving profitability in its car carrier business.
Mr Myochin says “As a result of these efforts, as well as efforts to accumulate profits based on our medium and long-term contracts and reduce operating expenses, we were able to achieve more progress in the first half of the year than originally planned.
Evergreen is at number seven with a fleet capacity of 1.2M TEU – but the size of its orderbook takes top spot in the list of largest container carriers, with 541,707 (65 ships) due to be delivered.
Its orderbook has increased from 393,348 TEU this time last year. In Q4 2019 it placed an order for 11 23,000-TEU container ships from South Korean and Chinese yards. Hudong-Zhonghua and Jiangnan Shipyard are constructing two vessels each. The remaining seven vessels were awarded to Samsung. This order comes on the back of the G-series of ULCSs for the Taiwanese owner. Its 11 20,150-TEU megaships started delivery in 2018. In February 2020, Evergreen launched an integrated container logistics platform.
GreenX is a digital portal for Evergreen customers to get instant quotes and book secured space with prioritised equipment supplied by the carrier. Evergreen says in a statement “Responding to the need for greater efficiencies through digitalisation, GreenX allows customers to enjoy seamless booking capabilities in addition to direct access to integrated trade services.”
8 Yang Ming
Yang Ming is at number eight in the rankings with a fleet capacity of 599,538 TEU. It has a sizeable orderbook of 198,100 TEU, including 14 11,000-TEU ships to be delivered between 2020-2022. These eco-type newbuildings with modern designs will gradually replace some of Yang Ming’s high-cost, older ships.
In August last year Yang Ming said it had reduced its financial losses “significantly” by 66% as compared to the previous year, “largely due to strategy implementation and cost control”. Furthermore, the Taiwan Ratings Corp has affirmed a stable rating for Yang Ming’s outlook in the long term. This result reflects Yang Ming’s improved cost structure driven by its fleet optimisation plan.
The ocean carrier adds “Since last year, Yang Ming has begun deploying its new eco-type container ships while returning some of its higher-cost chartered vessels. Through its strategic fleet deployment along with THE Alliance’s expanded partnership and future new service network, Yang Ming will continue to enhance business competitiveness and provide global customers with more excellent and comprehensive service quality.”
9 Hyundai Merchant Marine
Hyundai Merchant Marine (HMM) has a fleet capacity of 427,058 TEU. It has 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 says 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.”
10 Pacific International Line
PIL has a fleet of 341,748 TEU. It completed a newbuilding programme that comprised 16 11,800-TEU box ships in 2018, and currently has no newbuilds on its orderbook. In March, Neptune Pacific Line announced it acquired Pacific Direct Line (PDL) from PIL. The acquisition of PDL will strengthen Neptune’s Melanesian and Polynesian network, provide a link to Micronesia and the French territories, and enhance connectivity to global markets via strategic hubs in New Zealand and Fiji.
PIL executive chairman and managing director Teo Siong Seng says “The divestment of PDL is part of our strategic move that enables PIL to focus its resources on growing in the key liner markets it operates in Asia, the Middle East, Africa and South America. We will continue to improve our liner services between Asia and Oceania including the South Pacific Islands.”
PDL currently operates throughout the South Pacific region and specialises in providing liner shipping services from New Zealand and Australia to the South Pacific Islands. With the acquisition of PDL, Neptune will now have a specialised fleet of nine vessels dedicated to South Pacific Island trades and a team of more than 800, most of whom are based in supply chain services in the region.
11 Wan Hai Lines
Wan Hai Lines has leapt into 11th place, from 12th place last year – overtaking Zim in the process. It has a fleet that totals 270,196 TEU and an orderbook of 20 vessels (48,744 TEU). Wan Hai signed contracts with shipyards for these box ships in 2018 as part of its fleet improvement plan.
Wan Hai Lines confirmed the 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.
It comments in a statement “This new shipbuilding contract is the company’s latest fleet renewal plan, to ensure the company’s vessel fleet is able to remain competitive and support continuous market development. The company hopes to deliver better service quality to its customers with a more efficient vessel fleet.”
Zim dropped from 11th place last year to number 12, with a fleet totalling 270,876 TEU. This is less than the 320,834 TEU it had this time last year. It currently has nothing on its orderbook. This is another carrier focused on digitalisation as a member of the Digital Container Shipping Association.
It has also been preparing for the sulphur cap directive by installing Atlantium’s first Purestream ballast water management system on board its 3,854-TEU container vessel Zim Qingdao. Based on the initial success of the shipboard testing, ZIM has ordered another system for an additional vessel.
Korea Marine Transport Co (KMTC) has a fleet of 162,498 TEU and five vessels of a total 12,500 TEU on its orderbook. It 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 in 2018 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.
14 Zhonggu Logistics Group
Zhongghu Logistics Group has shot up the charts from number 16 last year to 14 this year. Last year marked its entry into the top 20; it was at number 33 in April 2018.
Its fleet has grown steadily, with a current total of 160,368 TEU, up from 137,513 TEU in April 2019 and 125,566 TEU capacity in 2017. The Intra-Asia carrier has also boosted its newbuild orderbook. Last year it had 1,448 TEU on its orderbook – this year the capacity has jumped to 4,964 TEU, totalling three newbuilds.
Iran’s national shipping line IRISL Group arrived in the top 20 in 2018 from a previous position of 24. The consolidation of several carriers, such as NYK Line, MOL and K Line into Ocean Network Express, allowed IRISL to move into the top 20. However, it has fallen from 14 last year to 15 this year as it has been affected by US sanctions on Iran.
But the shipping line is bouncing back and growing again. At the end of March, the head of trade promotion organisation of Iran Hamid Zadboum emphasised that backing shipping lines is one of the main policies of his organisation for promoting exports. He termed launching regular shipping lines by the Islamic Republic of Iran Shipping Lines (IRISL) as important for realising general policies of the "resistance economy and export promotion.”
IRISL’s regular shipping lines have been started by Khazar Sea Shipping Lines Company at the margin of the Caspian Sea, Sepid Shipping Company in the Middle East Gulf, Sea of Oman and India and Hafez Darya Arya Shipping Line Co in East Africa.
16 Antong Holdings
Quanzhou Ansheng Shipping, a subsidiary of Chinese transportation company Antong Holdings, has fallen one place from 15 last year to 16 this year. Before 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 145,772 TEU is set to be boosted by vessels of a total 14,782 TEU it has on its orderbook. This has reduced from April 2019’s figure of 19 vessels of 24,788 TEU, as vessels have been delivered.
SITC has a fleet of 110,576 TEU, with 5,564 TEU on its orderbook. The Chinese carrier boosted its fleet in March with the delivery of SITC Makassar, built by Yangzijiang Shipbuilding Group. The group is also bolstering its intermodal links. In early March this year, the Qinghai International Intermodal train with railway containers carried by SITC travelled from Chongqing railway central station departing from Qinghai Province on 5 March with the containers then sailing to Thailand by SITC.
This is the first launch of the Qinghai International Intermodal train this year. It also contributes to constructing the westbound passage with CCI Eurasia Land Bridge Logistics Development Co, China Railway Container Express Line and SITC. SITC says “The successful launch of Qinghai international intermodal train will provide high-efficiency and high-quality logistics services to foreign trade customers in northwest China.”
18 X-press Feeders Group
X-Press Feeders Group has slipped from its position of number 14 in 2018, 17 in 2019 to number 18 this year. Its orderbook has 5,564 TEU, split between two ships. Its fleet of 107,068 TEU consists of 52.8% of chartered-in tonnage, which has enabled it to take advantage of some cheap daily hire charter rates and allowed it to be flexible. X-Press Feeders is the world’s third largest and the single pure-feeder operator.
Sinokor has jumped into the top 20 for the first time, while TS Lines, at number 19 last year and SM Lines at number 20, have fallen out of the top 20, down to 21 and 22 respectively. It has a fleet of 72 ships of a total capacity of 90,919 TEU, with 23 ships on its orderbook, totalling 32,307 TEU.
Unifeeder has jumped into the top 20 for the first time. The European shortsea and logistics operator was acquired by DP World in 2018, and this acquisition has undoubtedly helped it to grow. Indeed, it has been expanding its network. In August it launched a weekly service between Gävle and Norrköping in Sweden and Gdynia and Gdansk in Poland. DP World said in its HI results last year that Unifeeder “is delivering in line with expectations and continuing to benefit from structural changes in the market”. Unifeeder has a fleet consisting of 93,795 TEU and 60 ships. It has no ships on its orderbook.