MSC is expected to surpass Maersk to become the largest shipping group

It took 50 years-but now, the mysterious shipping giant Gianluigi Aponte is about to reach the top.

The Mediterranean Shipping Company founded by the Italian businessman half a century ago is about to surpass AP Moller-Maersk to become the world’s largest container group.

The family-run group poached an executive from his Danish competitor and allowed outsiders to assume leadership roles for the first time. It is seeking to strengthen its position at the core of the global supply chain.

“I think this is a great opportunity to bring the best of the two worlds together,” Sorrentoft, who joined the private company as CEO in December after working at Maersk for 25 years, told British Financial Times.

“It’s about combining my experience, my insights and my foresight with the great attributes of MSC… We are private and we have long shots.”

Toft may have reached the right time to develop the Italian-Swiss Group, which has already begun to actively expand because it has taken advantage of the pandemic, which has brought record profits to shipping companies in the context of soaring freight rates. Mainly by the online shopping boom.

The profitable operation of shipping companies took place after more than a decade of overcapacity forced integration and capacity-sharing alliances.

Although Toft insists that “we are not affected by scale,” according to consulting firm Alphaliner, the company has purchased about 60 second-hand ships and ordered 43 new ships since August to show its opportunism .

An MSC container ship. Toft will use his experience at Maersk to help balance family and business interests © Rodrigo Garrido/Reuters

MSC is highly confidential, but before the pandemic, the group’s annual revenue may exceed $25 billion because its capacity growth will exceed that of rival Maersk and it has the largest new tonnage order.

Toft, described by those close to him as ambitious, rational, and impatient, will have to strike a balance between his desire to make a mark and aligning himself with the billionaire owner and his family.

For decades, Apontes has maintained close control over the company’s decision-making and culture as it expanded from cargo transportation to cruise ships, terminals, inland logistics, security and other areas.

According to a person familiar with the company, the founder and former Naples ferry captain also retained a sense of ocean family in the group, winning the strong loyalty of its more than 100,000 employees and even sending personalized letters to employees inviting them Participate in the naming ceremony.

Chart showing transportation capacity, existing fleet and order book

Another key feature of the company is its extremely short chain of command, and Aponte is closely involved in operational business decisions.

The line manager, accustomed to direct contact with the owner, met with him and senior family members-now Toft, who shared the ninth floor of the MSC Geneva headquarters with three members of the family.

Toft can use his experience at Maersk to help balance family and business interests.

About 30 years ago, Danish shipping giant Maersk Mc-Kinney Moller gradually withdrew from operational participation because his company became more transparent and transactional. Lars Jensen, shipping analyst at Vespucci Maritime, said: “He has experienced a similar journey before.”

In particular, Toft is likely to focus more on optimizing the global network instead of focusing on improving each of its 215 trade routes in order to achieve its goals. This is to ensure that the goods arrive on time and meet customer needs, while filling the vessel as much as possible.

He also tried to make this mysterious company that used to evade public attention more communicative, especially on social media.

This move partly reflects a strong concern for shipping due to delays and price increases caused by the pandemic and its impact on the climate.

Freight forwarders and analysts who are responsible for planning and coordinating freight routes said that despite improvements in recent years, MSC has always been known for poor service.

They added that a key priority for the new boss will be to update its outdated IT systems to improve these services and information provided to customers, which may involve significant investment.

Digitization is a special challenge facing the company because it exposes the shipping industry to new competitive pressures from freight forwarders that use digital technology and even companies such as Amazon and Alibaba.

“Uberization of the entire supply chain is a threat. If someone else provides space on your ship, then you have to bear the price,” said Stephen Cotton, secretary general of the International Transport Workers’ Federation. “They don’t want to be influenced by high-tech companies.”

Another challenge facing Toft is how to reduce carbon emissions. According to data from the NGO Transport and Environment Organization, the group is the sixth largest pollution source in Europe in 2020, and only coal-fired power plants emit more carbon dioxide.

The chief executive is taking a more proactive public stance on this, and recently warned that the EU’s climate measures on shipping may have an effect contrary to their intentions by increasing emissions.

Gianluigi Aponte

Gianluigi Aponte, the founder of MSC, is closely involved in the operational business decisions of the family-run group © Thomas Samson/AFP via Getty

He supports global carbon taxes in principle, but believes that the industry lacks visibility into when low-carbon fuels can be used on a large scale.

MSC is the largest debtor of Credit Suisse’s $6.8 billion main fund, which is related to the collapsed supply chain finance group Greensill, which also had to face some unwelcome concerns.

MSC stated that the US$321 million related to the freezing of funds has no material impact. “This is a thing of the past, and we have solved any problems we need to solve,” Toft said.

In addition to Greensill, analysts and bankers also speculated that the company’s cruise division is the world’s fourth largest cruise division, as well as its impact during the pandemic, and its impact on the wider group.

However, the huge profits of this year’s containers may make the cruise sector a force that cannot be ignored in the industry, and there are few signs that it will limit the group’s overall ambitions.

Toft said: “We see that there are many runways in front of us in many areas.”

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