Last week, the online Journal of Commerce (JOC) released its annual assessment of the top 40 container carriers using U.S. trade lanes. The most recent report lists the top carriers from January to December of 2014 and organizes different rankings for imports and exports.
Note: you will need an account with JOC.com to view the full report – don’t worry, it’s free to sign up. If you’re not a big fan of large tables with lots of numbers, you’re in luck. Read on for our analysis of the 2014 report.
Unsurprisingly, the list is largely indistinguishable from the 2013 report. The top five for 2013 were Maersk Line, Mediterranean Shipping, Evergreen Line, APL, and Hanjin, in that order. By the end of 2014, Mediterranean and Maersk had swapped for the #1 and #2 spots, Evergreen held strong at #3, and Hapag-Lloyd/CSAV Group and CMA CGM Group moved up to the 4th and 5th spots, respectively.
Looking at Growth
It was only a matter of time before Mediterranean Shipping took over as the #1 container line. The company has posted impressive volume growth over the past four years, increasing its shipments by nearly 35% since 2010. In contrast, Maersk has focused more on maintaining its already sizable fleet, posting growth rates less than 8% over the past four years. Just looking at the shift from 2013 to 2014, Maersk barely increased its volume by 3%, while Mediterranean Shipping managed to expand a full 13%. If these trends continue, we will likely see Mediterranean increase its lead over Maersk in the coming years.
Although Hapag-Lloyd and CMA CGM booted APL and Hanjin from the top 5, the latter two didn’t go far. They now occupy the 6th and 7th spots, albeit for good reason. Hanjin actually lost size over the past year, decreasing its volume by 3%. APL’s volume fell by a similar amount, but their fall perhaps raises greater cause for concern. The container line has dropped in the rankings for the last four years as it continually loses its volume share of U.S. imports. Although the size of this drop has fluctuated from year to year, we currently see no indication that APL won’t post another drop in excess of 3% by the time the 2015 report comes out next January.
Obviously, Hapag-Lloyd and CMA CGM are enjoying considerably better news. Both companies have seen steady growth rate over the past four years, and in fact CMA CGM has seen more growth since 2010 (38.2%) than #1-ranked Mediterranean Shipping.
Looking at the Top
Taken together, the top 5 contenders account for over 40% of the total market share. However, the difference between each of their individual holdings only ranges from 6.3-10.5%, meaning that they could easily trade off rankings from this year to next. Perhaps the only exception, as we mentioned, is Mediterranean Shipping, a company that is likely to hold strong at #1 if it maintains a track record of steady growth. Furthermore, Maersk may be vulnerable if the company doesn’t find a way to attract more volume. Although it currently boasts a market share a full 2% larger than 3rd place Evergreen, it may only be a year or two before Maersk surrenders its current rank and falls to #3 or lower.
The industry generally pays less attention to those outside the top 5, but JOC reports on the top 40 for a reason. There’s plenty to analyze further down the list as well. Perhaps most interestingly, the data indicates that China Shipping continues to struggle. The Eastern-based company has maintained its #15 spot since 2013, but just barely. Despite a slight resurgence in 2011, it’s clear that China Shipping’s overall trajectory is headed steadily downward.
After the 15th spot, total market share declines significantly, so China Shipping likely doesn’t have to start biting its nails just yet. Claiming volume over 3% of total U.S. imports, the container line still has plenty to flaunt – at least compared to ranks 16 through 40 – all of which control less than 2% of incoming trade, and some of which are small enough that their shares “round down” to 0%.
Lastly, if the industry is to see any smaller lines invading the top 5 in 2015 or beyond, it’s safe to predict Cosco, OOCL, “K” Line, or NYK Line will be the culprit(s). All four have seen attractive volume increases since 2010 and claim enough market share to put them within reaching distance of that coveted 5th spot.
Remember that this is all conjecture, and we can’t say anything definitively beyond the data right in front of our faces. Political, social, regulatory, and even climate changes could all affect the performance that container lines achieve in the coming years. As many of us learn every year when our March Madness brackets get destroyed, it never hurts to prepare for an upset. But in the mean time, we should remember to watch those top spots and focus on growth.