CMA CGM Could Overtake Maersk Line As World’s 2nd Biggest Container Line

According to Alphaliner’s latest report, CMA CGM, the French carrier, is on the verge of achieving a remarkable feat – surpassing Maersk Line as the world’s second-largest liner operator. This potential milestone comes from CMA CGM’s assertive strategies, which include substantial newbuilding orders and strategic acquisitions of second-hand vessels.

Presently, CMA CGM boasts an impressive fleet of 625 ships, collectively providing a capacity of 3.49 million TEUs (Twenty-foot Equivalent Units). What sets the company apart is its aggressive approach to expansion, having already placed orders for an additional 122 ships with a combined capacity of 1.24 million TEUs. These significant figures highlight CMA CGM’s determination to solidify its leading global liner operator position.

In contrast, Maersk Line, currently holding a fleet capacity of 4.14 million TEUs, only has 32 ships of 400,000 TEUs under construction. Since being displaced from the top spot in the liner rankings by the Mediterranean Shipping Company (MSC) in 2022, the Danish operator’s growth seems relatively constrained. Unless Maersk Line pursues further vessel acquisitions, it is projected to reach a capacity of 4.54 million TEUs by 2026 once all its new ships are ready.

On the other hand, CMA CGM’s aggressive expansion approach, with 122 ships on order, would enable its fleet capacity to reach 4.73 million TEUs by 2026, surpassing Maersk Line. This achievement further underlines the company’s growth trajectory and competitive edge in the maritime industry.

Alphaliner’s recent report indicates that as of mid-July, the order book for CMA CGM stands at 35.5% of its current fleet capacity. In contrast to MSC’s strategy of rapid fleet expansion through new buildings and extensive second-hand buying, CMA CGM has adopted a distinct approach.

The French carrier has focused on diversifying its fleet by procuring numerous mid-sized vessels through a substantial number of charters, which includes ships from the spot market and new tonnage for future delivery. This strategy showcases CMA CGM’s efforts to grow and strengthen its market position through a balanced and versatile fleet expansion plan.

CMA CGM has a history of reaching significant milestones. In July 2009, the company’s operated fleet surpassed the 1 million TEUs threshold. Five years later, in July 2016, it achieved another remarkable feat by crossing the 2 million TEU milestone. This growth was facilitated by the strategic takeover of Neptune Orient Lines (APL), which substantially increased the group’s liner fleet capacity from 1.79 million TEUs to 2.34 million TEUs, thus contributing significantly to CMA CGM’s rise in the liner operator rankings.

Like MSC, CMA CGM capitalized on the surge in freight rates in 2020 by actively purchasing pre-owned ships totalling 427,000 TEUs across various sizes. Additionally, the company secured 170 vessel charters since the beginning of 2023, establishing itself as the most aggressive charterer among all liner operators. These strategic moves emphasize CMA CGM’s proactive approach to fleet expansion and its determination to reinforce its position as a significant player in the global maritime industry.

In response to a weakening market, CMA CGM is considering letting go of older and less efficient ships when their charters expire in 2024. This move aligns with the company’s strategy to optimize its fleet and adapt to changing market conditions. Furthermore, CMA CGM plans to incorporate approximately 500,000 TEUs of new buildings between the present time and the end of 2024, introducing modern and more efficient vessels to enhance overall operational effectiveness and maintain a competitive edge in the industry.

Based on projected fleet additions, CMA CGM is expected to witness relatively modest growth in 2025, with an addition of 200,000 TEUs to its fleet. However, this figure is anticipated to double in 2026, reaching 400,000 TEUs. Assuming that half of CMA CGM’s order book is dedicated to fleet growth and the other half to replacement, the carrier’s fleet would stabilize at around 4.2 million TEUs by late 2026.

This approach highlights CMA CGM’s strategy to strike a balance between expanding its fleet capacity to meet growing demand and replacing older, less efficient vessels to maintain a modern and competitive fleet, establishing a sustainable position in the market for the long term.

Under the same assumptions, Maersk Line is expected to remain slightly ahead of CMA CGM, with a fleet capacity of 4.34 million TEUs by late 2026. The Danish carrier’s primary focus for new buildings is to replace conventionally-fueled vessels with more modern and environmentally friendly ones powered by green methanol. This emphasis on sustainability aligns with Maersk Line’s commitment to reducing its environmental impact and promoting eco-friendly practices within the maritime industry.

Maersk aims to enhance its operational efficiency and environmental performance by prioritizing fleet renewal and adopting greener technologies without pursuing aggressive fleet expansion. Despite the relatively narrow margin, the company’s forward-looking approach strengthens its position as a leading liner operator, emphasizing sustainability and responsible growth in the shipping industry.

Reference: container-news, indiashippingnews, shipandbunker

CMA CGM Could Overtake Maersk Line As World’s 2nd Biggest Container Line appeared first on Marine Insight – The Maritime Industry Guide

Source: Maritime Shipping News