How Few Carriers Control Ocean Freight

We don't think much about ocean carriers (or how consolidated they are), but without them, international commerce would be impossible.

Currently, 90% of international trade occurs by sea due to the cost-efficiency and capacity advantages of containerships over other transportation modes. So, you'd expect to be large competition to get a share of this large pie.

Yet surprisingly, despite the vast scale of global trade, the ocean carrier market is dominated by a few large companies. Out of the 7,023 active ships and over 30.2 million containers in the global fleet, the top 30 carriers control 5,046 ships and 28.9 million TEUs (Twenty-Foot Equivalent Units), accounting for 71.8% of all ships and 95.7% of all TEUs.

The discrepancy of the share of vessels and TEUs handled also suggests that larger companies also consolidate around heavier vessels. Take, for instance, the two largest carriers: MSC and Maersk. On avearage, they have a capacity per ship of over 7,100 and 6,100 TEUs, respectively. On the other hand, the rest of carriers outside the top 30 have an average of 4,300 TEUs per vessel.

And now that we are looking at top carriers, it is worth noting that even amongst the 30 largest carriers, there is immense dispairties. The concentration of capacity is even more pronounced among the largest carriers. The top 10 carriers alone account for 84.26% of all containers at sea, while the top five carriers—MSC, Maersk, CMA CGM, COSCO, and Hapag-Lloyd—together control 64.52% of the global container fleet.

All this to say that maritime commerce, one of the most valuable assets, is consolidated amongst a handful of companies. Though many are highly reputable, such levels of consolidation could, at times, result in decreased performance.

Interested in learning more? Follow our newsletter: