Tonnage Titans – 2. Maersk

Søren Skou

Søren Skou. Credit: Maersk Line

Maersk Group has jettisoned its oil and tanker businesses this year and now that its acquisition of Hamburg Süd is under its belt, the Danish carrier can concentrate on its ambition to become an integrator of global container logistics.

It is a bold strategy, but the sheer scale of the world’s largest container shipping line, as well as its ownership of forwarding unit Damco and the fourth largest port operator APM Terminals, gives Maersk an advantage in building out its “one-stop-shop” strategy.

With the acquisition of Hamburg Süd, one in five of all containers shipped around the world, and one in four of all reefer containers, are moved by Maersk Line. Together, Maersk Line and Hamburg Süd have a total container capacity of more than 4 million teu and a global capacity market share of 19%.

IHS Markit data show that total tonnage of the Maersk Group, including Hamburg Süd and comprising ships both in service and on order, currently stands at 29.59 million gt, placing the carrier in second place behind COSCO Shipping. Maersk Line has a relatively subdued orderbook with total tonnage on order standing at 2.73 million gt, putting it in seventh place globally.

There was a slight increase in the Maersk fleet last year as 30,000 teu of additional capacity was deployed to accommodate incoming volume from a slot purchase agreement the carrier signed with Hamburg Süd and Hyundai Merchant Marine in February 2017. Maersk carried a total of 10.7 million feu in 2017 and the brisk container shipping business meant that by the end of last year just three Maersk vessels were at idle, with a capacity of just 24,000 teu.

During 2017, Maersk Line took delivery of five of 11 second-generation Triple-Es and four of nine 15,200 teu vessels that were ordered in 2015. The new vessels replaced older and less efficient tonnage, with Maersk Line scrapping 16 vessels in 2017. The company ordered 27 vessels in 2015, of which the remaining 18 vessels will be delivered steadily until the first quarter of 2019. 

The newbuilding contract signed with Hyundai Heavy Industries in 2015 to build the nine 15,200 teu vessels included an option for up to eight additional ships. Maersk Line in the fourth quarter of 2017 decided to exercise the option to have two vessels delivered in 2019. The two vessels will help meet increased demand and form part of the ongoing network optimisations.

So what about the mega-ship orders of 20,000-plus teu vessels that have come flooding in from other carriers? IHS Markit data show that approximately 30% of that new capacity to be deployed in 2018 will be for mega-ships of 18,000–25,000 teu.

Several carriers have jumped on the mega-ship order bandwagon. Earlier this year, HMM placed an order for 20 new container ships, 12 of them 20,000 teu-class vessels, while COSCO ordered 17 20,000-plus teu vessels that will be delivered by December 2019. Late in the second quarter of 2017, CMA CGM ordered nine ships of 22,000 teu, with Mediterranean Shipping Company ordering 11 of the giant ships just a week later.

As the carrier pursues its integrated strategy, the group’s chief executive officer Søren Skou said the vessels Maersk Line has on order will meet the increasing demand trend for containerised transport. Over the last five years, global container volumes have risen by 3.7% on average, reaching a low of 1% growth in 2015 and a high of around 5% growth in 2017. However, the container market has remained under pressure over this period because the supply of new capacity that has grown by 5.4% on average.