By Arthur PhotoToNic-Pics Link：Pixabay

The strong container shipping market has spawned new players on the US-Asia route. “Sea-Intelligence” said that new ocean carriers, which beside from the current 3 large maritime alliances, have grab more the market share out of the 2M alliance. Since the beginning of 2020, the market share of the 2M alliance (Maersk and MSC) has been lost to the independent ocean carriers that are not belong any alliance. This is partly because of the continuous emergence of new independent operators in this hot boiling market. These independent carriers include direct shippers such as Alibaba, Amazon, Wal-Mart, Home depot, etc.; non-vessel operating common carriers (NVOCC) charter their own ships, such as Ceva Logistics, Votia shipping, DSV logistic, etc.; independent Shipping lines other than (2M, THE, Ocean Alliance) such as Wan Hai, Westwood Line, CU Line, TS Line and so on. It is estimated that these independent carriers can account for 10% of the total cargo volume from Asia to the West Coast of the United States.  Look back the three major maritime alliances on the Pacific route as early as October 2018, the Ocean alliance surpassed the 2M alliance. Since then, the alliance has been on the rise. In recent weeks, the Ocean Alliance’s market share has reached about 40-45%, and the 2M Alliance’s market share is 30-35%. For some time, THE alliance has been hovering between 20% and 25%. Statistics show that since the beginning of 2020, the market share of 2M Alliance and THE Alliance has both declined.

“Sea Intelligence” estimates that nearly one-third of services provided between Asia and the West Coast of the United States are related to independent shipping carriers by these few months. It is understood that in recent months, many none member to the three major maritime alliances, such as China United Shipping (CU Lines), BAL Container Line, Wan Hai Shipping, Westwood Line, etc., have all launched new services on the US-Western route. It shows that the booming market and constant high freight rates have attracted more participants. The surge in demand has caused freight rates to hit a record high. At present, freight rates have not shown signs of decline. The considerable profit potential has also helped attract new operators of Asia-North America routes to compete with established alliances. According to market legends, Wan Hai and Evergreen’s newly launched container ships have already earned back the cost of the new ship as long as it makes a trip to the east and west coasts of the United States. So it is also a great encouragement for independent carriers to join this crazy party.

The interesting is that from the beginning of this year to now, there is an amazing data showing that the profits of the shipping industry are catching up with the technology giants! The top ten container shipping lines control more than 80% of the world's ocean container capacity and created three powerful shipping alliances. In 2021, the shipping industry's revenue and profits have been catching up to the technology giants. According to the consulting firm “Drewry Maritime Research”, if freight rates continue to rise, the overall operating profit of container shipping lines will reach about $100 billion in 2021, which is more than 15 times their profit in 2019, and may even exceed that of technology giants such as Apple’s Profit. Take Maersk, the world's largest container shipping company, as an example. In 2021, Maersk's annual profit is expected to reach 14.5 billion U.S. dollars. While the entire industry is expected to copy Maersk extraordinary financial performance, however, the voice of anger with sky-high shipping costs has become dramatically increasing in public. Most stock market analysts believe that shipping lines have earned back the money of the past decade in just past few quarters.

On the last few articles, which have mentioned that the US Congress has proposed a maritime reform bill, and the South Korean maritime regulatory agency has filed anti-monopoly lawsuits against dozens of large and small shipping companies in South Korea, including HMM, all due to crazy freight rates. A few years ago, the US Department of Justice conducted a two-year antitrust investigation into the industry, but it was finally abolished in 2019. However, when shipping fees are skyrocketing, the supply chain is blocked, and strong trade groups such as U.S. agriculture come to Congress to complain and promote related bills, the Biden administration once again put the industry under the spotlight to examine it. In July and August of this year, it instructed the U.S. Federal Maritime Commission (FMC) launched two surveys separately, pointing to competition and high costs respectively. Previously, FMC has audited nine shipping companies, including Maersk, and investigated whether these shipping lines have used market monopoly to collect demurrage fees from shippers. It is reported that FMC will submit an interim report on September 2rd and The final report will be submitted on February 2. However, sadly to point out that even if a fine is incurred, the maximum is six digits. It is conceivable that the possibility of such a final penalty will only encourage more container carriers to join the competition. However, from an economic point of view, more competitors can eventually bring about perfect competition, and finally consumers will surely get the most reasonable products and services. We look forward to this day coming soon.