MSC overtook Maersk as the world’s largest shipping company – Quartz
The Mediterranean Shipping Company (MSC) has dethroned Maersk as the world’s largest shipping company in terms of container capacity, according to data from maritime analysis company Alphaliner. The reshuffle ends Maersk’s 25-year reign as the undisputed champion of freight transportation.
MSC took this step today (January 5) when Alphaliner Daily Update Database recorded that MSC now owns or charters enough vessels to carry the equivalent of 4,284,728 sea containers, slightly exceeding Maersk’s total capacity of 4,282,840 containers. Each 20ft sea container can carry the equivalent of 400 flat screen TVs (or 48,000 bananas).
“It will undoubtedly have hurt Copenhagen to lose first place,” wrote Simon Sundboell, founder of the maritime intelligence platform eeSea, in an email. “It has been an identity and pride for Maersk – and Denmark – for many years to be the world’s largest container shipping company.”
The two shipping companies have made different bets on the future of their industry. Maersk has decided to no longer focus on shipping and on more profitable lines of business, such as air freight, trucking, warehousing, port terminal operations and the sale of logistics software. The company aims to reinvent itself as a one-stop-shop for every step of the supply chain.
In a press release from March, Maersk wrote that “the company made the strategic decision to change course … Maersk turned to next generation technologies, big data and innovation to transform into an integrated end-to-end logistics company at the end “. Maersk did not immediately respond to a request for comment.
Meanwhile, MSC has doubled down on its strategy of building a fleet of mega-ships that can deliver goods at the lowest possible cost. “MSC has made a significant investment in new, highly efficient ultra-wide vessels,” the company said in an emailed statement. CEO Soren Toft, who MSC poached far from Maersk in 2019, added, “Size is not a goal for us… Growth, profitability and customer support are what have driven us and what will keep us going.
MSC leads in containers, not fleet size
MSC has overtaken Maersk on one key indicator: the number of containers it can carry on the ships it owns and charters. This is the most important measure of the size of a shipping company because it means MSC can carry more cargo than Maersk.
But MSC’s dominance is unclear. On the one hand, Maersk still has more shipping capacity than MSC. MSC makes up the difference by temporarily chartering freighters from other lines. MSC is seeking to close this gap by ordering more new ships. MSC has ordered nearly one million 20-foot equivalent units (TEUs) of new freighters, compared to 255,000 TEUs for Maersk.
Maersk also owns and charters more ships than MSC, although this is not necessarily an advantage. MSC’s strategy has been to purchase the largest container ships available, as they can operate more efficiently than smaller vessels. While large ships cost a little more to operate, they can carry a lot more cargo, so if they are fully loaded their routes will be more profitable than smaller ship routes. MSC ships carry, on average, around 6,600 TEUs, compared to Maersk’s 5,800 TEUs on average, according to Quartz’s analysis of Alphaliner data.
MSC’s new place at the top of the shipping capacity rankings reflects the investments the world’s largest shipping companies are making with the billions of dollars in profits they made during the pandemic. As supply chains normalize in 2022 and beyond, time will tell whether Maersk’s decision to invest in ground logistics or MSC’s mega-ship strategy turns out to be prescient.
Sundboell, the founder of eaSea, said MSC could still decide to follow in Maersk’s footsteps. The company can change its strategy quickly since it is a private company and tightly controlled by a core of managers in Geneva. “MSC will definitely look to Maersk and assess whether it needs to go in the same direction, especially now with Soeren Toft as CEO,” he wrote. “Do not underestimate their ability to move quickly and decisively in one direction, if they decide on such a strategy. “