Shift From Chartering To Ownership: Liner Operators’ Strategic Response To Market Dynamics

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  • In response to the Covid-19 pandemic, liner operators have pivoted towards owning rather than chartering ships, a trend underscored by MSC’s significant fleet expansion through acquisitions and newbuildings.
  • MSC stands out for its aggressive pursuit of vessel ownership, with a notable shift from chartering to owning ships.

Over the past decade, MSC’s fleet has more than doubled, with a substantial portion now comprising owned tonnage. The Geneva-based carrier, which once had over 60% of its fleet on charter, has seen this percentage decrease as its owned tonnage has risen, reflecting a strategic move towards self-sufficiency and operational control.

MSC’s Fleet Expansion Strategy

MSC has ordered 88 newbuildings and acquired 355 secondhand vessels since 2020, cementing its position as a major player in the container shipping industry. The carrier’s fleet expansion strategy has enabled it to boost its capacity to 5.7 million TEUs, a significant increase from 2.4 million TEUs a decade ago. Alphaliner’s report suggests that MSC’s ownership of vessels could be even higher than officially reported, considering the extensive use of bareboat agreements with purchase options or obligations.

CMA CGM’s Transition

Following MSC’s lead, CMA CGM has also ramped up its ownership of container tonnage. The French carrier, which once had just 20% of its operated fleet owned, now boasts a fleet that is 40% owned. CMA CGM’s fleet expansion strategy mirrors that of MSC, with a focus on acquiring both newbuildings and second-hand vessels to support its growth trajectory. Over the last four years, CMA CGM has ordered at least 80 new ships and acquired over 112 pre-owned vessels, signaling a strategic shift towards fleet ownership.

HMM’s Resurgence

HMM’s turnaround story includes a substantial increase in owned tonnage, signaling a departure from reliance on charters towards a modern, self-owned fleet. The South Korean carrier, which faced near collapse in 2016, has since reset its business model, focusing on building a fleet of large vessels for its own account. Today, HMM’s fleet of 816,077 TEUs is 55% owned, up from 30% a decade ago, reflecting a strategic transformation aimed at ensuring long-term sustainability and competitiveness.

SITC Container Lines’ Transformation

SITC Container Lines has witnessed a remarkable transformation, with a vast majority of its fleet now owned. The Chinese intra-Asia carrier, which once had half of its fleet chartered, now boasts a fleet that is 95% owned. This dramatic shift towards ownership reflects SITC’s strategic focus on stability and control in fleet management, enabling the company to navigate market fluctuations with greater resilience and agility.

ZIM Line’s Contrarian Approach

In contrast to the trend towards ownership, ZIM Line maintains an asset-light strategy, with the majority of its fleet chartered. Despite industry shifts towards ownership, ZIM Line continues to prioritize flexibility and cost-efficiency in its fleet management approach. Currently, 93% of its fleet of 720,396 TEUs is chartered, reflecting a different strategic stance amidst evolving market dynamics.

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Source: Container News