Linerlytica analyst Tan Hua Joo believes Mediterranean Shipping Company (MSC) is flawlessly replicating rival Maersk’s former strategy by aggressively expanding its fleet and terminal network.

Tan spoke at the "Managing Container Freight Rate Volatility" conference in Singapore.

While container freight rates soared to record highs during the pandemic, MSC expanded its fleet through newbuilds and secondhand vessels, whereas Maersk took the opposite approach—betting on an integrator strategy to transform itself into an end-to-end logistics provider.

Tan noted that with a fleet exceeding 6.44 million TEU, MSC has far surpassed Maersk, whose fleet now stands at just over 4.5 million TEU. Back in 2020, 80% of MSC’s fleet was chartered, but today, that figure has dropped to 25%, with the Swiss liner owning over 400 vessels.

"MSC has perfectly executed Maersk’s old playbook of market dominance—and Maersk is losing at its own game," Tan said. "Since acquiring Hamburg Süd in 2016, Maersk hasn’t grown. But MSC’s moves have forced strategic reactions from others—CMA CGM, COSCO, Evergreen, and ONE won’t just sit back while sitting on record profits. They’ll spend their cash on more ships to chase growth."

Maersk is paying a heavy price for its stagnant fleet growth. The Danish carrier, along with its "Gemini Alliance" partner Hapag-Lloyd, lags behind competitors in the trans-Pacific trade with just 3 million TEU of capacity.

MSC’s unprecedented expansion—unmatched in industry history—will force rivals, including Maersk, to respond. Last week, reports surfaced that Maersk temporarily boosted its fleet above 4.5 million TEU, exceeding its earlier cap of 4.3 million TEU.

Tan warned that this race for market share, combined with historically low scrapping rates, is perpetuating overcapacity: "Everyone’s doing the same thing. This will lead to severe oversupply—potentially worse than anything we’ve seen before."

Even if the Red Sea crisis drags on, 2024 will likely see freight rate corrections. If diversions via the Cape of Good Hope continue, the massive orderbook and minimal scrapping could push fleet growth to 6%—or 15% if Suez Canal transits resume.