The World’s Largest Container Shipping Companies

The World’s Largest Container Shipping Companies

Companies are ranked by two metrics. First is the number of ships they own, and second is their total shipping capacity measured in twenty-foot equivalent units (TEUs). A TEU is based on the volume of a twenty-foot long shipping container.

The data used in this infographic comes from Alcott Global, a logistics consultancy. Fleet sizes are as of June 2021, while TEU capacity is from January 2022.

Maersk and MSC are tied for first place in terms of TEU capacity. This is no longer the case, as news outlets have recently reported that MSC has overtaken the former.

Trailing behind the two industry leaders is a mixture of European and Asian firms. Many of these companies have grown through mergers and acquisitions.

Maersk : Maersk is Denmark’s third largest company by market capitalization. The firm was founded in 1904, making it 118 years old.

MSC : The Mediterranean Shipping Company (MSC) has grown very quickly in recent years, catching up to (and surpassing) long-time leader Maersk in terms of TEU capacity.

The Swiss firm has increased its fleet size through new orders, acquisition of second-hand vessels, and charter deals.

COSCO Shipping : COSCO Shipping is China’s state-owned shipping company. American officials have raised concerns about the firm’s expanding global influence.

For context, Chinese state-owned enterprises have ownership stakes in terminals at five U.S. ports. This includes Terminal 30 at the Port of Seattle, in which two COSCO subsidiaries hold a 33.33% stake.

Moving forward, any further Chinese interest in U.S. terminals will face an even more stringent regulatory environment.

Evergreen : Evergreen is likely a familiar name, but not for the right reasons. In 2021, one of the company’s ships, Ever Given, became stuck in the Suez Canal, putting one of the world’s most important shipping routes out of commission for nearly a week.

INTERESTING FACTS

Bulking Up : To achieve better economies of scale, container ships are growing bigger and bigger. The following chart illustrates this trend from 1970 to 2017.

Average capacity is being pulled upwards by the arrival of mega-ships, which are ships that have a capacity of over 18,000 TEUs. Their massive size creates problems for ports that weren’t designed to handle such a high volume of traffic.

It’s worth noting that the largest ship today, the Ever Ace (owned by Evergreen), has a capacity of 24,000 TEUs.  

Going Green : Bloomberg reports that shipping accounts for 3% of the world’s carbon emissions. If the industry were a country, that would make it the world’s sixth-largest emitter.

Due to the growth of ESG investing, shipping companies have faced pressure to decarbonize their ships. Progress to this day has been limited, but there are many solutions in the pipeline.

One option is alternative fuels, such as liquefied natural gas (LNG), hydrogen, or biofuels made from plants. These fuels could enable ships to greatly decrease their emissions.

Another option is to completely do away with fuel, and instead return to the centuries-old technology of wind power.

Understanding ESG in maritime industry: Key trends

A growing interest from investors in companies’ climate and societal accountability has spurred record inflows to funds focused on environmental, social and corporate governance (ESG) issues, with Reuters characterizing 2021 as “the year of ESG investments”. This trend is expected to shift ESG as a priority in the corporate sphere and in maritime industry as well, putting a pressure on corporate boards to boost their ESG skills.

First seen as a term in 2005, ESG stands for Environmental, Social and Governance factors. ESG is vital for describing the criteria that investors use to evaluate a company and determine if this is worth investing in, analyzing material risks and growth opportunities. This means ESG helps companies’ social and environmental efforts to be quantifiable, thus more easily measured.

In the US alone, 2021 inflows into ESG funds surpassed 2020’s total inflows of $51.1 billion before the end of Q3 in 2021, according to US-based corporate law firm Skadden. Earlier data by Refinitiv Lipper revealed $649 billion poured into ESG-focused funds globally as of 30 November 2021, up from the $542 billion and $285 billion in 2020 and 2019, respectively, with ESG funds currently representing 10% of global fund assets.

Meanwhile, topics surrounding green and climate finance, both in public and private sectors, are expected to be high on the agenda of the upcoming COP27 in Egypt, especially as the COP 26 laid the ground for discussions on compensations to developing countries damaged from climate change effects. In addition, the European Commission has finalized its “sustainable finance taxonomy” rulebook on which corporate activities can be labeled “climate friendly”.

In the maritime sphere, “’environment” constitutes the fundamental pillar where companies develop their ESG strategies. Decarbonization and other environmental issues come to the fore but there are also other key topics that will impact long-term decision making in the sector. According to the Global Maritime Issues Monitor 2021, talent shortages loom in the background as a result of the crew change crisis, digital issues re-emerge as a priority in light of recent attacks and economic and geopolitical issues have been overshadowed by environmental issues.

Several of the latest insights into ESG pinpoint greenwashing as a main challenge to manage in the near future. Current estimates show that greenwashing may increase as ESG becomes more and more important to investors, sparking more stringent regulations. While many corporations release ESG-related data in 2021, there is an increasing skepticism by investors, regulators, and the broader public that these corporations may be using misleading facts as a marketing tool to embellish their environmental achievements.

Meanwhile, a recently increasing trend of shareholder activism puts pressure on companies to support for ESG-related proposals, with the most recent example being the pressure of shareholders to oil majors Exxon Mobil and Shell to be more ambitious in emissions cuts and shed bigger focus on gender equality, both constituting hot topics in the current shipping landscape.

How shipping companies can manage ESG issues

Transparency and consistence in reporting, are of the essence, since ESG will be increasingly linked to the reputation of a company and inevitably its ability to remain competitive in a highly competitive market, PwC has noted. The following steps are fundamental for effective ESG monitoring and reporting:

Identify ESG topics and key stakeholders

Raise awareness around ESG topics and ensure top management commitment

Assemble a project team with suitable skills

Select an appropriate ESG Framework and criteria that will cover stakeholders’ needs

Record processes and controls relevant to the processing of sufficient appropriate ESG data

Identify and assess relevant risks and their impact on ESG reporting

Implement improvements required to safeguard ESG data relevance and integrity

Report on ESG performance

Invest in training staff ashore and on board

Monitor ESG and ESG reporting on a continuous basis

Foster an ESG-driven culture

The way forward for ESG in shipping

In an era of continuous transformation across all sectors and a global recognition of the need for sustainability, it is beyond doubt that financial actors are more demanding on ESG performance, requiring not only 100% transparency across all data, but also strong indications that a company’s culture is driving beyond compliance. This is evident in an increased interest observed in ESG from stakeholders across the business sector in the last two years, a trend expected to keep rising.

And while the shifted interest of shipping towards ESG leaves us with a “wait and see” approach regarding the progress in popularity of Poseidon Principles, on how aggressive the IMO decisions will be in the sphere of GHG emissions in the near future, as well as the extent to which the financial sector will prioritize “greener” shipping companies from competition, it is most likely that the environmental pillar will maintain a leading role in the formulation of ESG strategies by maritime organizations in the coming years