Maersk Line Could Lose Largest Container Line Title

The company will return chartered ships and stop new orders for several years

In three years, Maersk Line could lose its title as the world's largest container shipping line to Mediterranean Shipping Company (MSC), supply chain industry site The Loadstar reports based on research published Tuesday by shipping consultancy Alphaliner.

Maersk Line has said that it will not place orders for new ships until at least 2015 and that it will return chartered vessels to their owners as its huge Triple-E vessels continue to enter service.

"Maersk's reluctance to add to its immediate orderbook could see its global capacity share drop from 14.9% to 14% by 2016," Alphaliner wrote.

Market Share

Maersk Line chief executive, Soren Skou, said last month that it is working to increase profitability by reducing costs.

"Last year we made the decision to go from an aggressive growing-market share strategy to a grow-with-the-market-and-maintain-our-market-share strategy," he said.

"That allowed us to take our capacity; it allowed us to close down a significant number of unprofitable routes, and those ships that were freed-up we have invested back into the network for slow steaming – adding additional ships to slow down the network."

In contrast, MSC, which is also one of Maersk Line's partners in the upcoming P3 Alliance, has some 465,000 twenty-foot equivalent units (TEUs) of new capacity on its order book. 

Other container lines are also continuing to grow their capacity, including China Shipping Container Lines Co. Ltd. (CSCL), which ordered five 18,400 TEU ships from Hyundai Heavy Industries (HHI) earlier this year.

The CSCL ships are larger than Maersk Line's Triple-E ships and were reportedly less expensive, costing $136.4 million each compared with $185 million for each Maersk ship.

"Maersk's efforts to bring supply in balance with declining demand growth have not been emulated by the other carriers, which are still aiming to grow their market shares," Alphaliner wrote.

"Based on the forward orderbooks of the rest of the top 20 carriers, Maersk's market share lead will be diluted over the next three years.

"The twin impact of the lack of new orders and the redelivery of chartered tonnage could see Maersk lose its market share lead by 2016, with MSC well positioned to take over the lead carrier position, with its order book of over 465,000 TEU."