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The slow death of the ‘national line’

The world of container shipping is not an easy business to make money in by anyone’s standards, but for what can be characterised as “national lines” the modern day landscape has been especially tough.

Marcus Hand, Editor

August 20, 2014

2 Min Read
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The Shipping Corporation of India (SCI) is mulling exiting the sector, a decision not dissimilar to that made by Malaysia’s MISC two years back. Both companies operated national lines that held relatively small market positions, in MISC’s case 27th by slot capacity, SCI’s according to analyst Alphaliner 50th as of August 2014.

Lines such as MISC (formerly Malaysia International Shipping Corp) and SCI were designated to help their country’s trade and move it on domestically owned ships. Some 25 or 30 years ago this concept made sense in terms of how the world worked, as full scale globalisation had yet to take hold, so it followed you would want to move your exports on vessels your country owned.

As globalisation took a hold this concept largely went out of the window. Goods were increasingly manufactured in multiple locations around the world parts and unfinished goods shipped from one place to another until finally there was a product for re-export from its final place of assembly. Even commodities such as seafood from Europe for sale in the same country they are caught are shipped many thousands of miles to Asia to be processed and shipped back.

Container shipping is to thank for this - it enabled remarkably cheap shipping across the globe that meant locally based manufacturing or processing was no longer a necessity. This was also extremely bad news for the national line as its role became ever more redundant as they were out-competed by major private or family-owned players who either leveraged economies of scale or niche market strategies.

A glance through today’s most successful in the sphere is an interesting exercise, the most successful were and remain from their roots private businesses backed in majority by individuals or families, even if they are public-listed.

At the top of the tree we have Maersk Line, which has racked up an impressive $1bn profit in the first half of 2014, and they are followed by Mediterranean Shipping Co (MSC) privately run family company based in landlocked Switzerland. Of lines that have taken a more niche approach Hamburg Sud with its acquisition of CCNI is set to make the top 10 of container lines globally, while family-owned Pacific International Lines occupies a strong position in the Africa and intra-Asia trades, even profitability has been mixed in the last few years based on figures from a recent bond issue prospectus.

While the national shipping company has become a thing of the past in the container sector there are other parts of shipping where it remains very much alive and well. The LNG trades where long-term transportation deals are the norm, and the world’s largest LNG carrier owner is Qatar Gas Transport Company (Nakilat) built around the country’s huge volume LNG exports.

Read more about:

MalaysiaMaerskMISCIndia

About the Author

Marcus Hand

Editor

Marcus Hand is the editor of Seatrade Maritime News and a dedicated maritime journalist with over two decades of experience covering the shipping industry in Asia.

Marcus is also an experienced industry commentator and has chaired many conferences and round tables. Before joining Seatrade at the beginning of 2010, Marcus worked for the shipping industry journal Lloyd's List for a decade and before that the Singapore Business Times covering shipping and aviation.

In November 2022, Marcus was announced as a member of the Board of Advisors to the Singapore Journal of Maritime Talent and Technology (SJMTT) to help bring together thought leadership around the key areas of talent and technology.

Marcus is the founder of the Seatrade Maritime Podcast that delivers commentary, opinions and conversations on shipping's most important topics.

Conferences & Webinars

Marcus Hand regularly moderates at international maritime events. Below you’ll find a list of selected past conferences and webinars.

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