Ocean Alliance closing the gap with 2M as market share battle heats up

Ocean Alliance closing the gap with 2M as market share battle heats up

The Ocean Alliance will pursue a “hard drive” for market share in the coming couple of years as a flood of new ultra large tonnage joins the new container grouping, a leading analyst claims.

Lars Jensen, founder of Seaintelligence Consulting and a regular Splash contributor, took to LinkedIn in the wake of yesterday’s Splash exclusive that CMA CGM will shortly order up to nine record breaking 22,000 teu ships. Jensen noted that once confirmed these new orders will see the Ocean Alliance – made up of CMA CGM, Cosco, Evergreen and OOCL – increase their combined fleet capacity by 21%. By contrast, 2M stands to grow capacity by less than 7% and THE Alliance by less than 10%.

2M is made up of Maersk and MSC with Hyundai Merchant Marine as a junior partner, while THE Alliance has K Line, MOL, NYK, Yang Ming and Hapag-Lloyd as its founding members.

Jensen said the competitive dynamics in the coming 18 months is going to become dominated by the need of the Ocean Alliance to grow market share significantly in order to utilise their new deliveries.

Looking at the part of the global fleet controlled solely by the alliance carriers, their respective capacity market shares right now, according to data from Seaintelligence Consulting, sees 2M on 44%, the Ocean Alliance on 35% and THE Alliance on 21%. If the existing orderbook and the new orders from CMA CGM are added, this stands to change to 2M on 42%, Ocean Alliance up to 38% and the THE Alliance on 20%. However, this is the global average. The orderbook is skewed towards ultra large vessels which will be deployed in the Asia-Europe trade.

The pressure on the Ocean Alliance to grow its market share could increase further if rumours from China prove correct that Cosco is readying for another swathe of newbuild orders.

Yesterday’s CMA CGM news was greeted with incredulity by many Splash readers. Renowned ship financier Paul Slater described the order as “madness”, commenting on this site that the container sector is already “grossly” overtonnaged.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.

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