According to a report by the United Nations Conference on Trade and Development (UNCTAD), major shipping operators increased their capacity over the past 17 years, with COSCO, CMA CGM and MSC registering the largest increases.
For COSCO and Maersk, the increase in capacity also reflects merger and acquisition activities (e.g., Hamburg Sud and OOCL), growth in vertical integration and the need to service new markets (e.g., COSCO/Piraeus).
The end of 2M has implications for MSC and Maersk, their customers and the shipping industry.
From the UNCTAD angle, there could be changes in pricing as they pursue service differentiation objectives.
As CMA CGM and COSCO are also set to expand their fleet until 2024, some observers argue that both shipping lines will be in a better position to compete with MSC and Maersk in a post 2M scenario.
UNCTAD says this may add uncertainty to Evergreen’s future, while some small and medium-sized carriers may abandon an increasingly aggressive market.
More companies could break ranks and abandon alliances. A reorganization would redefine the competitive landscape and market shares.
Some carriers may prefer to group into preferred port pairs, which could reduce shippers’ options, according to Drewry Maritime Research.
An examination of the top 100 Lloyd’s List ports in 2021, and more specifically the 84 deep-draft ports, reveals that MSC, Maersk and COSCO deployed their largest capacity in more than two-thirds of these 84 ports.
Vertical integration between liner and terminal operators can foster the development of transshipment hubs, attract volumes and stimulate feeder services.
Governments and port authorities will need to assess whether the additional business potential outweighs the risks associated with further vertical integration.