MSC CEO on Fleet Expansion: 'We Didn't Get Carried Away'

MSC overtook Maersk to become the world's largest container line at the start of last year. File Image / Pixabay

Shipping firm MSC, which overtook AP Moller-Maersk to become the world's largest container line at the start of last year, has set out some of the thinking behind its rapid fleet expansion over the past two years.

The firm currently has 4.88 million TEU of capacity in its fleet -- representing 18.2% of total global capacity -- and another 1.67 million TEU's worth on order. That compares with 4.15 million TEU and 370,200 TEU respectively for Maersk, in second place.

MSC's fleet expansion came in the immediate aftermath of the COVID-19 pandemic, when global trade disruptions led to record rises in container freight rates. Those rates have rapidly declined back towards historically more familiar levels over the past year as the market normalises and on the prospect of upcoming economic weakness.

"We didn't get carried away in the last two years, let me put it that way," MSC CEO Søren Toft told Ship & Bunker on the sidelines of the IBIA Mediterranean Energy and Shipping Conference in Genoa on Thursday.

"We know some of the fundamentals of shipping, and we also expected that they would sooner or later return," he said.

"That's why we are making sure that, through the acquisitions we have done, we are in a good place, we can meet the customers' demand, we can hopefully also generate some positive returns."

The expansion in both second-hand acquisitions and newbuild orders came for a variety of reasons, Toft added.

"It's about growth," he said.

"We bought a lot of second-hand ships because there was significant demand out there from customers in the COVID period.

"Then it's also about fleet renewal -- we have a big fleet, and we have to renew our fleet quite a bit.

"It's about competitiveness and costs; we need to make sure we're not just the biggest company, but the most competitive.

"And it's about replacing a number of charters, because the fact of the matter is that we can actually operate ships that we run and operate ourselves better than the traditional charters."