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Container Shipping & Trade

Container Shipping & Trade

Consolidation causes carrier top 20 reshuffle

Thu 31 May 2018 by Rebecca Moore

Consolidation causes carrier top 20 reshuffle
Despite its position as top of the league when it comes to tonnage, Maersk is conservative when it comes to newbuild orders

M&A activity in the container shipping sector has allowed regional players and fast-growing new carriers to enter the top 20 biggest box shipping lines. Contrasts are marked: some of the lines have huge orderbooks, others have nothing

1: Maersk Line

Continuing its hold on the number one spot is Maersk. With a current fleet of 4.1M TEU and an 18.7% share of the world’s global container fleet, it does not look like it is going to relinquish the top spot any time soon. Indeed, its position has strengthened with its takeover of Hamburg Süd at the end of 2017. As of April last year, Hamburg Süd had a fleet of 568,219 TEU (108 ships). Despite its position as top of the league when it comes to tonnage, Maersk is conservative when it comes to newbuild orders. It has 12 ships consisting of 105,288 TEU on its orderbook, only a tiny 2.5% of its total fleet.

2: MSC

MSC is at number two, with a fleet of 3.3M TEU. The carrier hit the headlines last year when it announced it was building 11 ships of 22,000 TEU. This has pushed its orderbook up to 32,052 TEU, with 18 ships on order, giving its future fleet a 10.2% share of its total fleet. The carrier announced in April this year that it will equip its newbuilds with 11 MAN B&W 11G95ME-C9.5 high-efficiency main engines. There are concerns that this large order – and that of CMA CGM’s – could unbalance the delicate supply demand situation, by causing other carriers to follow in their footsteps.

3: CMA CGM

French carrier CMA CGM made the ground-breaking move to use dual-fuel LNG for its nine 22,000 TEU mega newbuilds – the first ultra-large container ships to be fuelled by LNG. This will have huge ramifications for the container shipping industry. France-based GTT is supplying the 18,600 mᶾ fuel tanks. These will enable a complete voyage from China to Europe before refuelling. The fact this is possible will surely make other container ship owners mull over the possibility of LNG for ultra-large container ships. The vessels will only use a few per cent of marine gas oil for ignition in the combustion chamber. CMA CGM is building partnerships with ports and LNG suppliers to create a strong bunkering infrastructure – something that will encourage other box ship operators to choose LNG.

4: COSCO

COSCO will become even more of a super power in 2018. The takeover of OOCL by COSCO, due to take place this year, is a signal of how powerful COSCO is becoming. It has enjoyed a huge cash injection by the Chinese Government to put towards its newbuild programme and it has a major role in China’s Belt and Road initiative, with its port division aggressively buying stakes in Europe and elsewhere. The company has the second-largest orderbook in the top 20 carriers – currently standing at a huge 404,407 TEU. This makes up 20.5% of its whole fleet (newbuild and current combined).

5: Hapag-Lloyd

Hapag-Lloyd is still at number five – but its tonnage has jumped since Alphaliner’s top 20 list (dated April last year) due to its acquisition of UASC, completed in May last year. Then, its current fleet was 1.0M TEU. Now, it has soared to 1.6M TEU. Its acquisitions of CSAV and UASC has strengthened its hand on the increasingly important north-south trades (in the case of CSAV) and equipped it with 18 ULCVs thanks to UASC. Interestingly, the carrier has no container ships on its orderbook – a contrast to others that have long orderbooks. The firm explained last year that it anticipated no vessel newbuilding investments for several years because its merger with UASC has given it enough additional capacity to meet demand.

6: ONE

The combining of NYK, K Line and MOL’s container ship businesses as Ocean Network Express (ONE) has pushed the Japanese trio to number six in the Alphaliner top 100 largest ocean carriers. Last year, NYK was at number 10, MOL at 11 and K Line at 14. ONE has 115 vessels at a total of 1.5M TEU. MOL has provided the largest number of ships and TEU capacity of live ships, with 26 ships at 232,466 TEU, followed by K Line at 23 ships of 162,177 TEU. NYK provided 16 ships at 116,372 TEU. The move to form ONE looks positive for both the Japanese carriers and the container ship market. ONE said its focus would be on service quality, while the merger will allow it to strengthen its position in certain trades, such as Africa.

7: Evergreen

The formation of ONE has pushed Evergreen from number six to number seven. The carrier has the largest orderbook in the top 20 carriers, standing at 479,974 TEU, making up 43% of its overall fleet. This figure has jumped since last year when as of April 2017, Evergreen had 310,000 TEU. It took delivery of its largest ship, Ever Golden,  in April this year. It is the first of 11 20,150 TEU ships ordered from Japanese shipyard Imabari Group in October 2015. The vessels, which will be delivered over the next 18 months, were ordered through Shoei Kisen, the ship financing arm of Imabari, which will charter them to Evergreen. Evergreen’s first 20,150 TEU ship Ever Golden joins Ocean Alliance’s NEU3 Asia-Europe sling, which consists of 14,000 TEU box ships.

8: OOCL

OOCL is number eight, with a current fleet of 690,773 TEU. It has nothing on its orderbook – in Alphaliner’s 2017 list, it had 126,600 TEU (six ships) on its orderbook, but these units have since been delivered. During 2017, OOIL took delivery of five of a total of six Giga-class 21,413 TEU vessels ordered from the Samsung Heavy Industries shipyard. The last vessel in the series was delivered in January 2018. Big changes could be afoot for OOCL as it is due to be acquired by COSCO this year. UK’s Drewry Shipping Consultants has dubbed OOCL the ‘perfect bride’ for its good track record for above-average profits in a challenging market and a reputation for being a very well-run company – therefore retaining the management team, processes and systems “is a wise move and could be of enormous value to COSCO”, it said.

9: Yang Ming

Yang Ming has held on to its number nine position, but it has been a rocky road for the carrier. The Taiwan-headquartered carrier lost a massive US$492M in 2016 – double the loss it made in 2015. But the carrier turned things around last year after launching a recapitalisation plan and returned to profitability for 2017. Yang Ming said in a statement “In addition to strengthening its operating strategies such as management centralisation, Yang Ming has over the past year deployed strategies to optimise cargo structure, integrate information technology systems, and continuously train staff to improve knowledge and expertise.” Yang Ming said it will continue to explore and develop new markets, optimise its fleet deployment and take advantage of opportunities to minimise its operating costs and improve profitability.

10: Pacific International Line (PIL)

PIL has leapt up the league – from number 14 as of April last year to number 10 due to the mergers and acquisitions that have taken place in the container ship industry. Last year’s number nine, Hamburg Süd, has joined Maersk; NYK, MOL and K Line (numbers 9, 10 and 15) have formed ONE; and UASC (in at 12 last year) has been acquired by Hapag-Lloyd. Only four independent mid-sized carriers remain, said Alphaliner in July last year: PIL, Yang Ming, Hyundai Merchant Marine and Zim; of these PIL is the only one not government-linked. PIL has embarked on a newbuilding programme that comprises 16 11,800 TEU box ships due for delivery between the end of this year and 2019.

11: Hyundai Merchant Marine (HMM)

HMM stands out as its orderbook of 398,020 TEU is larger than its current fleet (393,292 TEU). It announced in April this year that it will order 12 box ships of 20,000 TEU and eight of 14,000 TEU – and will use LNG or scrubbers on all of these ‘eco-friendly’ mega ships. HMM said the benefits of its shipbuilding programme include being able to secure stronger “fleet competitiveness with the benefit of economies of scale” and helping the carrier to “form a stable basis for making profits”.

12: ZIM

Israeli carrier ZIM is at number 12 with a fleet capacity of 389,667 TEU. It has no ships on its orderbook. The carrier was restructured in 2014 and pulled out of loss-making services, including Asia to Europe, to focus on routes such as Asia to the US east coast. Its financial results for 2017 reveal that it was back to black, with an adjusted net profit of US$50M for 2017, following a loss of US$150M in 2016. It loaded 8% more containers on its ships to reach 2.6M TEU. There has been speculation that the company could be a target for M&A activity, but the fact it is linked to government makes it seem unlikely it would be a target.

13: Wan Hai Lines

Taiwan’s Wan Hai Lines has 98 vessels at a total of 253,257 TEU. It has nothing on its orderbook. Last year it had eight vessels of 15,200 TEU on its orderbook, which have all been delivered. Wan Hai’s core business has been on the intra Asia trade, where traditionally rates have been far more stable than other trades, as have volumes which have increased steadily. This has allowed Wan Hai to grow its main business before expanding elsewhere. It is still growing its intra Asia business. In July last year it launched a Japan Express service, linking Singapore and Malaysia, and in April this year, it announced it was launching an Indonesia to Malaysia service. 

14: X-press Feeders

The gap created by consolidation means that some regional carriers and feeder operators have been catapulted into the top 20 rankings. The X-Press Feeders group has evolved over the years to become the largest feeder operator in the world, replicating the global networks of its deepsea carrier customers as these have gradually exited from serving second and third tier ports. Its feeder services now cover most of the main markets and it claims to annually carry 5.3M TEU. X-Press Feeders has a very high proportion of chartered-in tonnage – 79.2% of its fleet– which has enabled it to take advantage of some cheap daily hire charter rates and allowed it to be flexible.

15: Korea Marine Transport Co

Korea Marine Transport Co is an intra Asia regional company, deploying regular container liner services to China, southeast Asia, southwest Asia, the Russian Federation, and the Middle East. The company also owns and operates terminals in the port of Ulsan and Busan New Port. This carrier has joined the top 20 due to all the consolidation that has taken place within container shipping lines. Its position in the top 20 reflects the strength of the intra Asia trade which is now similar in size to the Asia–Europe and transpacific deepsea trades. The carrier is benefiting from a mix of newbuilding and newbuilding charter tonnage – on its orderbook it has six ships of a total of 10,800 TEU.

16: Antong Holdings

Quanzhou Ansheng Shipping, a subsidiary of Chinese transportation company Antong Holdings, has risen up the ranks and is now at number 16, last year it was at 29. This is due to the mergers and acquisitions that have spread through container shipping lines. Aggressive newbuilding plans have also propelled it up the table, pushing its fleet from 67,073 TEU as of April last year to 134,603 TEU this year. It currently has 29,676 TEU on its orderbook. Its latest order was placed in December 2017, for 12 640 TEU box ships, to be built at Fujian Southeast Shipbuilding, Fujian Mawei Shipbuilding and Nantong Xiangyu Marine Equipment. Each of the shipyards will build four vessels. The newbuildings are expected to be delivered in 2019.

17: Zhonggu Logistics Corp

Zhonggu has shot up the rankings – from number 33 in April 2017 to number 17 this year. It has a fleet of 125,566 TEU and 20,556 TEU on its orderbook. This is a huge jump compared to last year, when its fleet was comprised of just 60,240 TEU, with 20,000 TEU on its orderbook. In January 2017 it announced it was raising US$87M through shares to fund 10 2,500 TEU box ships.

18: IRISL Group

Iran’s national shipping line IRISL Group has leapt into the top 20 from number 24 after UASC, Hamburg Süd, NYK Line, MOL and K line disappeared as separate names. It has been affected by political events as it will be subject to US sanctions following the 180-day wind-down period, leaving in doubt a newbuild order it placed with South Korean shipbuilder Hyundai Heavy Industries for four 14,500 TEU container ships in late 2016. Alphaliner reported in May that despite the completion of two of the four ships 14,599 TEU ships, they had yet to be delivered to IRISL. It said “The first, Rayen, was completed on 23 April and should have joined Hafez Darya Arya Shipping, part of IRISL Group on 25 April. It was to be followed by the second ship, Radin, on the same service on 6 June. However, the plans appear to have been disrupted by the current diplomatic tensions, with Rayen remaining idle off Ulsan for the past three weeks.”

19: SITC

Chinese carrier SITC has a total fleet of 79 ships at a combined total of 107,995 TEU. Its owned tonnage consists of 70,687 TEU, while its chartered fleet is smaller, at 37,308 TEU.  It looks like it has plans to expand as its orderbook consists of 10 ships of a total of 15,666 TEU, which is a contrast to last year when it had nothing on its orderbook. SITC sold its 2,496 TEU SITC Makassar box ship to MPC Container Ships in April this year.

20: SM Line

Fast-growing SM Line has entered the top 20. The South Korean carrier was formed from the now-defunct Hanjin, with five ships coming from that carrier. SM Line’s parent company, Samra Midas Group, acquired the business operations of Hanjin's Pacific and Asian routes. Many of SM Line’s personnel also come from Hanjin. SM Line carried 187,910 TEU in 2017, making up 1.6% of the 11.9M TEU imported through US west coast ports in 2017, according to PIERS. It has a fleet of 78,599 TEU. Last year Alphaliner labelled the carrier the fastest growing new carrier in container shipping history. It had an initial six services covering northeast Asia-southeast Asia, Far East-India and transpacific routes, with services launching in March and April 2017. SM Line has since launched a new transpacific Pacific northwest service from mid-May 2018, using six ships of 4,000 TEU – 4,600 TEU.

 

 

 

 

 

 

 

 

 

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