Maersk CEO Soren Skou has said he wants his company to become “a global integrator of container logistics — a company very similar to UPS and FedEx” — over the next three to five years. CMA CGM, which already owns a third of CEVA Logistics, is making a bid for its outstanding shares.
It also notes that it risks alienating or losing business to other companies such as forwarders and NVOCCs or even terminals, which compete with the carriers. For example, just last week the terminal operator DP World completed its acquisition of Unifeeder, which is a competitor of Maersk’s Sealand feeder ship subsidiary. (Maersk recently combined and rebranded its Seago Line, MCC Transport and Sealand units under the Sealand brand.)
Drewry says other carriers, such as Hapag-Lloyd, are focusing on their core product, “putting network optimization and revenue management at the forefront,” alongside reliability and service quality.
“The upside here is that if the more ambitious carriers crash and burn in their supply chain adventures, Hapag-Lloyd will be sitting pretty and won’t be overly burdened by servicing debt. The downside risk is that if the global integrators are successful, they will look second rate and vulnerable to takeover.”
A third strategy that may be pursued by some smaller carrier is “playing catch-up” to the larger carriers, says Drewry. It points to Hyundai Merchant Marine, which has an owned and chartered fleet with capacity of 408,118 TEUs. That’s nothing to sneeze at — Alphaliner ranks as the 10th-largest carrier in terms of capacity — but it is far behind Maersk, MSC, COSCO, CMA CGM, Hapag-Lloyd, ONE and Evergreen, which have fleets ranging in size from more than 4 million TEUs to just under 1.2 million TEUs.
The Korean carrier added that it was “surely confident we can fill up the newly ordered mega containerships,” but Drewry said, “Buying more Ultra Large Container Vessels when the market can barely accommodate what is already on the water will delay the industry in obtaining balance between supply and demand that could sustain greater profitability. There is little point having mega-ships if having them means freight rates are uneconomic.”
Drewry said it thought the number of carriers pursuing such “catch-up strategy” will be small, “limited to companies with state backing or ties to shipyards in need of assistance.” And indeed, Japanese and European officials have been critical of HMM’s orders and Korean support for the shipbuilding industry.