MSC, Buying “Anything That Floats,” Likely to Surpass Maersk
INNOVATION, MSC SANTHYA < KRVE 34 & MSC GAYANÉ — Flickr image by kees torn
The Mediterranean Shipping Company, better known as MSC, is poised to surpass Maersk as the biggest ocean freight carrier in the world by capacity. And the shipping line could to do it soon. Right now, MSC is aggressively buying up ships, increasing its capacity. In fact, it’s buying ships so aggressively that one sales and purchases (S&P) broker told The Loadstar that MSC is “interested in virtually anything that floats.”
Mike Wackett shared that S&P broker quote in a Loadstar article outlining a “massive buying spree of second-hand tonnage” from the world’s second largest carrier by capacity:
According to Alphaliner, MSC has “embarked on a massive buying spree of second-hand tonnage worth around $180m, anticipating asset price rises, on the back of a fast-improving charter market”.
…
Transactions by MSC, both on the charter and S&P (sales & purchase) markets, are kept closely under wraps, but Alphaliner said it understood that the carrier was buying four 8,200-8,500 teu Zeaborn Ship Management-controlled ships for a total price of $114m.
And, according to vesselsvalue.com data, MSC purchased a quartet of 2006-built 8,533 teu sister vessels, the ER Tianping, ER Tianshan, ER Tokyo and ER Texas, on 30 October for $28m each.
…
With its recent purchases, MSC has further narrowed the capacity gap with Maersk, which now stands – with its orderbook – at some 160,000 teu, a margin that could easily be overcome with an order of new ULCVs.
ULCV stands for ultra large container vessel. The world’s largest container ships have a capacity of over 20,000 TEU (twenty-foot equivalent units). That means MSC, again this is including ships it has ordered, is potentially only three ships shy of surpassing Maersk’s capacity. That could be obtained with one order.
Such an order would not be unprecedented. In fact, I wrote an article here in Universal Cargo’s blog a year ago about an order for five ULCVs by MSC that, according to an article from Mike Wackett at that time, put the carrier on course to overtake Maersk within two years.
Even though the two carriers are alliance partners with their 2M vessel sharing agreement, Maersk wasn’t happy with MSC’s move a year ago toward overtaking Maersk. Wackett quoted a Maersk senior manager as saying at the time, “MSC are getting too big for their boots and we have a fight on our hands to stop them.”
Bitterness also grew between the companies a year ago as MSC poached one of Maersk’s top executives, Søren Toft, to be its CEO.
I wouldn’t expect Maersk to give up its title as the world’s largest ocean freight carrier very easily, so this could be an interesting battle to watch. As Highlander would say, there can be only one… number one. Well, I added that last little bit, but after all, who strives to be number two?
