One of the stranded Hanjin vessels is floating around off the coast of Singapore, waiting for what comes next after the South Korean container carrier folded under the weight of a record-high capacity and all-time low rates.
"All of this can be traced back to 2011, when Maersk Line ordered its Triple-E vessels," says executive consultant at analyst firm Alphaliner, Tan Hua Joo, when ShippingWatch meets him in Singapore:
"The next factor was the launch of Daily Maersk."
He thus points his finger directly at Denmark's Maersk Line as the key culprit for the industry currently finding itself in its most serious crisis ever.
"Maersk started the race to acquire major vessels. If they hadn't ordered Triple-E vessels, I don't think any of the others would have embarked on procuring vessels of this size. So I'm fully convinced that these orders triggered the major capacity war."
More of the same in 2017-18
Tan Hua Joo describes how Maersk Line through the past 20 years has grown at a factor of 17, MSC with a factor 35, and CMA CGM at a factor 50 – in a period in which the container market has only grown sixfold.
"Of the 30 largest container carriers in 1986, only 18 are left today – well, 16, actually, if we also rule out UASC and Hanjin," says Tan Huan Joo, putting the development into perspective in terms of the current market situation.
"We will see more of the same in 2017 and 2018: Record-low charter and freight rates, while we still haven't moved past the overcapacity that arose already back in 2009 following the financial crisis," he says, continuing his bleak forecast:
"Demand growth will grow by two percent at the most – and for some port terminals even less, due to less transshipment."
Maersk Line: Rational decision for us
But to draw a direct line between Triple-E and the crisis currently enveloping the sector, this is something which Maersk Line's Chief Executive for Asia and the Pacific not willing to accept:
"I won't be held accountable for what our competitors decide to do. We've always been market leaders, and for a transporter such as us, and with our size, it makes sense on certain trades to order ships of this size," Robbert Van Trooijen tells ShippingWatch in response to the criticism.
"It was a rational decision, and we also had a bigger market share at the time of the aquisition."
But this focus on market share is one of the sector's biggest problems, notes Tan Hua Joo of Alphaliner:
"Not just at Maersk, but throughout most of the container sector I note a basic sense that carriers feel it's their basic right to defend their market share. This is virtually driven by an obsession with market shares," says Tan, before returning to Maersk Line's order for the Triple-E vessels.
"Even though they were looking to defend their market share, they always had the option of chartering instead of acquiring larger vessels. As such, I don't buy the argument that just because the market share didn't increase, they didn't start the race for size."
Pulled the trigger too soon
Tan is not trying to place responsibility for the crisis with Maersk, but he does note that management at the carrier misread the situation back in February 2011:
"They pulled the trigger too soon. This was just after the market had corrected itself in 2010, and prospects were still highly uncertain. There were no fundamental market forces to support this capacity increase," explains Tan, adding that now, five years later, are still new container ships in the 14-18,000 teu range set to join the global fleet.
However, Robbert Van Trooijen maintains that Maersk is not accountable for how competitors have reacted to the Triple-E series:
"We made a decision which made sense for us on Asia-Europe, and which still makes sense, especially when the market is as low as it is now, where unit costs are so important," he says, stressing:
"People often think that we on our own can control the market, but the market controls itself. We've merely deployed a vessel which is economical and makes sense for us on that trade. And again, I can only explain what makes sense for us. Not what makes sense for our competitors."