MSC’s fleet growth could create market imbalance

MSC’s buying spree has seen the Swiss-Italian No. 1 carrier single-handedly remove 25% of ships from the charter market, driving up asset and charter rates, according to Linerlytica.

At the World Maritime Merchants Forum in Hong Kong in November, Linerlytica analyst Tan Hua Joo said that MSC has grown its capacity by 1.8 million TEU after buying 470 pre-owned ships.

Tan noted that MSC’s fleet growth is about the size of the worldwide container shipping fleet at the start of the 21^st century.

Tan pointed out that while MSC has grown organically through substantial newbuilding orders and second-hand ship purchases, its current fleet of over 7 million TEU puts it far ahead of its competitors, creating a major imbalance in the container shipping market.

Despite the ongoing correction in freight rates on long-haul lanes, charter rates remain stubbornly inflated, and have trebled from past levels.

Vessel availability remains extremely tight across all size segments, with panamax ships now being taken off end-2026 dates while larger ships of over 5,000 teu now fixed for 2027 positions.

MSC’s strategy has affected not only the supply of ships.

Tan said that MSC has effectively raised the entry barriers for smaller operators, creating an uneven competitive landscape.

As the record orderbook begins to be delivered in 2027 and 2028, the gap between MSC and its peers will widen.

If there are not enough containers to fill the many new ships entering the waters by then, there could be a steep fall in freight rates, warned Tan.

The post MSC’s fleet growth could create market imbalance appeared first on Container News.