Battle of the Giants: MSC and Maersk fight for market share in the Asia-Europe sector.

The two heavyweights have been jockeying for position in the market share war for a long time. As Mediterranean Shipping Company (MSC) and Maersk Line continue to modify their strategies in the punishing economic climate existing today, UK based Containerisation International says that MSC has replaced Maersk Line as the world's biggest container shipping company, but only if Maersk's units Safmarine and MCC Transport are excluded. If those two are taken into account, the Maersk Group is still nine per cent larger as a container carrier, said the CI report, adding that MSC had a capacity of 1,848,440 TEU in service in the middle of February.

The cusp of the rivalry lies in the Asia-Europe business, with both companies rolling out plans for giant container vessels that each hopes will allow it to take advantages of economies of scale and garner market share. In the process, other carriers are feeling the pressure already, trying to adopt either similar policies or choosing to stay away from the bruising fight. Alphaliner says that MSC, which has a fleet of 43 box ships over 12,500 TEU, is likely to increase its market share at Maersk Line's expense; the company took over the 43rd ship earlier this month. MSC will operate these vessels on its Far East-Europe-Mediterranean services. In contrast, Maersk has 21 vessels of 11,500 TEU each. 

Maersk is not expected to receive any of its massive 18,000 TEU Triple E class vessels before 2013, while MSC is expected to add to its ultra large container vessels this year, ending up with a final tally of 56 vessels at current order book levels.  Of these, 52 will be bigger than 12,500 TEU.  “This gives MSC an edge to increase its market share substantially this year, mainly at the expense of Maersk,” says Alphaliner.

Interestingly, Maersk has cut back on its capacity in the Asia-Europe sector by 9 percent as it entered into an agreement with CMA CGM to share vessels on that circuit. The company has stated its intention to defend its market share "at any cost."

Alphaliner says that the “expected introduction of new tonnage by MSC on the Far East-Europe route could boost the carrier's capacity share from 15.5 percent to around 17.5 percent by the end of the year, while Maersk's share of market capacity would be reduced from 23.6 percent to 21 percent over the same period.”

Analysts say that the slugfest between the two giants is already threatening other companies, and that the weaker ones will face tremendous pressure in the coming months as they simultaneously fight overcapacity and a profit squeeze; a shakeout is likely, experts warn. Others point out that even Maersk Line decided last month not to exercise an option to order another ten  18,000 TEU vessels from South Korea’s Daewoo shipyard; those would have been delivered around 2015.

"That had been implied quite a while ago,” says Martin Dixon, editor of Drewry’s Container Freight Rate Insight. “There’s too much capacity, and demand on the Asia-Europe trade where those vessels would have been deployed is slowing. Demand is unlikely to be strong on that trade in the two years ahead.”