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Top 10 control fleet capacity

Wednesday, February 28, 2018

MORE than 87 per cent of the global fleet capacity is controlled by only 10 out of 67 shipping lines operating fully cellular containerships, which is less than 7 per cent of the total lines, according to the data from MDS Transmodal.

Danish liner major Maersk Line is on the top of the list with an estimated share of over 21 per cent of the global market (excluding intra-regional).

Maersk Line is followed by its 2M Alliance partner Mediterranean Shipping Company (MSC) in second place and CMA CGM in third place. The remaining top 10 players include German liner Hapag-Lloyd, COSCO, Evergreen, OOCL, MOL, Yang Ming and NYK.

Over the past four years, the top 10 shipping lines have seen their combined market share increase from 68 to 83 per cent, according to the UK-based consultancy.

During the said period, the top 10 lines have seen their deployed capacity increase from some 55 million TEU to 86.7 million TEU. The increase was mainly driven by consolidation and mergers and acquisitions over the past few years, a process which is far from over.

Namely, Orient Overseas Container Line (OOCL) is to become part of China Ocean Shipping Company (COSCO) some time this year, bringing the duo's combined share in the deep sea trades to around 12 per cent.

In April 2018, the container divisions of Nippon Yusen Kabushiki Kaisha (NYK), Mitsui O.S.K. Lines (MOL) and Kawasaki Kisen Kaisha (K Line) will merge, forming a joint venture called Ocean Network Express (ONE). MDS estimates that their combined share of the deep sea trades will be 8.7 per cent.

With fewer lines dominating the market, smaller lines are facing an ever-increasing pressure.

On the major three east/west routes, the market is dominated by the three alliances- Ocean Alliance, 2M and the Alliance - although at different magnitudes. On the Asia-Europe routes, lines that are not part of alliances account for just 1 pct of the total deployed capacity, whereas on the Transpacific and Transatlantic routes, they account for 11 per cent and 17 per cent respectively, data from MDS shows.

However, on the individual routes, mergers and acquisitions and consolidations could indirectly offer opportunities for small players.

For instance, the strict conditions imposed by the regulatory authorities on Maersk operations after the acquisition of Hamburg Süd have offered the chance for a small line, in this case, Pacific International Lines (PIL), to launch a service between Asia and South America EC.

Nevertheless, the longevity of this kind of services is far from certain as they will be subject to rates volatility, MDS concludes.

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