"Uncertainty of certainty" is not a rhetorical statement for the sake of profundity, but an accurate description of this era. Against this backdrop, the head shipping giants are either bold or conformist, stirring up storms in the magnificent ocean.
Maersk – "Game of Thrones" for the consolidated logistics industry
Since September 2016, Maersk has been transforming from a containership giant to a supply chain logistics provider. Until 2021, abundant cash flow further accelerates its determination to change.
It has to be said that Maersk's reform can be described as a boiling stock.
On the one hand, because of its "bellwether" as a container shipping company, any disturbance will arouse the attention of competitors, customers and partners in the ecological chain; on the other hand, since the determination to change 5 years ago, Maersk has gradually planned a vertical acquisition to create an end-to-end full logistics road. In the era of ups and downs in the shipping industry, Maersk has made a great difference in the vast ocean, and in the post-epidemic era, they have gone from sea to land, acquired logistics companies, customs brokers, landed in dry ports, and developed warehousing and distribution business.
Maersk has said in its previous earnings report that in order to build an end-to-end distribution network, it is currently carrying out three aspects of services: one is the core service, Maersk has adjusted the marine basic products; the other is freight forwarding services, which have made progress in international and domestic freight. Third, value-added services, the new products revealed by Maersk can support other products and can also be used as an experiment for future development directions. It is implemented through the following four specific measures: one is internal product or supply development; the second is mergers and acquisitions; the third is investment, mainly focusing on investment in Maersk's growth plan; and the fourth is the ability to develop in collaboration with others.
Subsequently, whether it is the launch of Marsk Spot, a platform for quotation and booking, or the launch of digital freight forwarding Twill Logistics, or the acquisition of Vandegrift, a large customs brokerage company in the United States, to win The Performance Team, the leading warehousing and distribution supplier in North America... It seems that every move is resolutely implementing the direction of Maersk's change.
It is undeniable that these actions have more or less alienated some of its partners, making the latter wary of Maersk's ambitions on land. But Darwin, who believed in natural selection, once said, "The species that can survive are not the strongest, nor the smartest, but the ones that react most quickly to change", for a giant like Maersk, standing at such a treacherous crossroads and daring to turn the bow of the ship is already extremely courageous, not to mention that maintaining ambition in the business world is an encouraged choice.
Mediterranean Shipping – Brave the First
In 2019, after Maersk's former COO Soren Toft officially became CEO of MSC, MSC became more active in marketing and communications, but it still stubbornly maintained a mysterious image.
As a private company that doesn't need to release financial information, it has disclosed almost nothing for years, not even annual income. However, while Maersk, which has been ranked first in Alphaliner's global liner company rankings for many years, has no longer maintained a frenzy for new large ships, MEDITERRANEAN Shipping has achieved a leap in handheld orders by customizing large ships and buying used ships in large quantities.
Currently, MSC has a fleet of 628 vessels of approximately 4.21 million TEU, including 244 own vessels and 384 chartered vessels. At the same time, MSC Shipping also has 60 new ships under construction, with a total capacity of about 1.017 million TEU, which is the only company among the container shipping giants to have a handheld order exceeding 1 million TEU, and the existing handheld orders account for 24.2% of the fleet capacity, ready to become the world's largest container shipping company.
Beyond that, it's hard to get more information from the shipping giant, which almost never declares its strategic goals. According to rumors, when making major decisions, MSC only asks for the opinions of the company's think tank, not the company's general manager and route operators, whose sole duty is to implement the company's decisions. Of course, Soren Toft, as Mediterranean Shipping's first "outsider" CEO in five decades, may break the old rules.
CMA CGM – what is lost must be "doubled" and taken back
In 2019, in order to alleviate cash flow pressure, CMA CGM Group painstakingly transferred its 10 terminal equity assets to Terminal Link (hereinafter referred to as "TL") for a transfer consideration of US$968 million, and China Merchants Port obtained 10 terminals distributed in Europe, Southeast Asia, the Americas and other regions, in the global main hub port, with good development prospects.
But they would never have imagined that in 2021, the maritime business will soar, and Q2 will make a net profit of $4.576 billion, and then they will never forget to "get back" part of the terminal equity at a high price.
In September, CMA CGM signed a 35-year franchise agreement with Abu Dhabi AD Ports Group. In the terms of the agreement, the committed investment in Khalifa Port's new automated terminal alone is AED 570 million (US$154 million).
In November, CMA CGM again acquired a 90% stake in the Fenix Marine Services (FMS) terminal in the Port of Los Angeles, and since CMAF already holds a 10% stake in the terminal, CMA CGM will become the sole owner of the FMS terminal after the completion of the transaction, which is worth $2.3 billion.
In addition, CMA CGM is also actively laying out its air cargo business. France-based CMA CGM Air Cargo will establish a French air carrier certificate and plans to launch service on the 777F all-cargo aircraft next year, with the group acquiring four former Qatar Airways A330-200F all-cargo aircraft earlier this year.
Of course, the ability to absorb gold in its "main battlefield" maritime business is unambiguous, as the world's third largest container shipping company, currently has 570 container ships, since December 31, 2019, through the addition of new ships and the purchase of second-hand ships, the fleet capacity increased by 11%, the first quarter of this year profit reached 2.1 billion US dollars, an annual increase of more than 2000%, the second quarter profit of 4.576 billion US dollars, another 2458%.
COSCO SHIPPING – Smooth or Change?
To talk about the future of COSCO SHIPPING, we really can't ignore the major personnel changes on November 1. On the same day, Wan Minrong returned, took over the baton Xu Lirong, and became the chairman of COSCO SHIPPING Group.
FROM THE SECOND HALF OF 2020 TO 2021, COSCO SHIPPING HOLDINGS (601919) FROM THE SECOND HALF OF 2020 TO 2021, THE SHIPPING MARKET SAW BOOM (601919) PERFORMANCE HIT A RECORD HIGH, ACHIEVING OPERATING INCOME OF 231.479 BILLION YUAN IN THE FIRST THREE QUARTERS OF 2021, AN INCREASE OF 96.65% YEAR-ON-YEAR; NET PROFIT ATTRIBUTABLE TO SHAREHOLDERS OF LISTED COMPANIES WAS 67.590 BILLION YUAN, AN INCREASE OF 1650.97% YEAR-ON-YEAR The net profit attributable to the shareholders of the listed company, net of non-recurring gains and losses, was about 67.421 billion yuan, an increase of 1781.54% year-on-year. Under the leadership of Xu Lirong, the company went from loss to profit to reversal of the profit and loss of the cumulative profit statement, and finally the matter was whisked away, and the handover baton was steadily passed to Wan Min.
From December 11, 2017 to November 1, 2021, Wan Min's role was changed from general manager of COSCO SHIPPING Group to chairman of China Tourism Group, and then returned to COSCO SHIPPING Group to take over as chairman. He seems to be facing the best of times, COSCO SHIPPING Group's internal integration effect is prominent, external container shipping prices are higher, shipping companies have achieved a significant increase in profitability, and cash flow is exceptionally abundant. However, he is still facing an era full of hidden worries, with continuous trade frictions, chaos in the global logistics supply chain, congestion in the ports of the United States and the West, and a series of challenges requiring increased requirements for low-carbon transformation. To lead the ship to where, whether it is another smooth decade or a turbulent future, the new helmsman may need to give a new strategic direction.