Update: 2M Partners Maersk and MSC Reduce Fleets

Maersk and MSC, partners in the global 2M shipping alliance, separately announced cuts to fleet size on November 4.

A news source reports that Mediterranean Shipping Company (MSC) will reduce the number of chartered vessels it operates while maintaining its newbuild program. MSC operates 307 chartered vessels and has an orderbook of 46 vessels as of November 4, according to public data from Alphaliner.

Maersk and MSC are the world's largest containership lines, with 594 and 497 ships operated respectively. Together as the 2M Alliance they comprise nearly 30% of the world's container capacity by TEU.

Maersk will reduce capacity by not exercising six of eight existing newbuild options with Daewoo Shipbuilding and Cosco. Additionally Maersk will reduce its head count by 4,000 people, mainly through attrition.

Maersk has already laid up at least one large Triple E container vessel, and may cold stack others during the slower winter season.

In an interview, analyst Jan Tiedemann  indicated that part of the overcapacity in container shipping was due to a burst in newbuild orders prior to the implementation of new emissions regulations.

"Shipping companies definitely ordered too much because they tried to get these ships with a Tier II compliance," Tiedemann said, referring to the new international regulations aimed at cutting nitrogen oxide emissions.

"What happens now is some who optimistically have done that are getting cold feet. They thought maybe we can get away with it - the ships will be delivered in 2017, the market would have recovered by then and now they say, 'we're digging our own grave'."

Maersk Line responded that it had not purchased additional vessels to avoid the regulations, noting its previous order for new ships was in 2011.