Sunday , October 24 2021

Chinese transport Cosco wants to overcome Maersk and dominate the world


Cosco's ambition to outdo Maersk and win the title of the world's largest shipping company is no secret. The Chinese company wants to dominate the world and its intentions should not be taken lightly. They are closer to being a warning than a simple desire.

At a time when the shipping industry was shifting between mergers and acquisitions because of the prolonged economic crisis, the state merger between China Shipping and China Ocean Shipping was a matter of survival. However, it turned out that Cosco turned out to be far more efficient in the administration of his country's maritime affairs than his predecessors.

The number of investments and expansions Cosco experienced in the last two years demonstrates its determination and the urgency of its plans. But to understand the scope of their ambitions, it is necessary to observe the change of the shipping company from a broader perspective.

Beijing help

Although Cosco openly declares its intention to outdo Maersk, its long-term goal could be another one of greater importance. With financial support from the Chinese government, the shipping company seems to share the aspirations of Asian power to become the world's main economic force. And, of course, Cosco's growth potential is immense, with the world's largest market at its feet.

The shipping company moves slowly but surely. This year, the OOCL purchase catapulted it to third place in the ranking of the largest shipping companies, behind Maersk and MSC. Following this operation, more than half of the Ocean Alliance's TEU (20-foot equivalent) capacity was under its control, consolidating its dominance within the alliance.

On the other side of the world, Cosco continues to expand its presence in Europe, as evidenced by the recent acquisition by the shipping company of the Zeebrugge terminal in Belgium, the second largest port in the country.

Although this was the first strategic entry for the Chinese shipping company in northwestern Europe, if we look at the move on a larger scale, it was simply the latest in a series of acquisitions in Europe in recent years. And just a small piece in the big Beijing project that aims to physically connect the Asian and European continent. In fact, it is estimated that China currently has about 10% of the total capacity of the European port.


In deciding its next steps, the shipping company faces the challenge of maintaining its strategic vision, choosing a path that it can sustain. Thanks to the Chinese government's support, its financial options are intimidating and one of the alternatives would be to pave the way for investment scams. But the key question is: Would you be able to keep this path?

Because one thing is to invest and another quite different is to get benefits. In the last decade, shipping companies have invested heavily in increasing the size of their ships. Later, the industry witnessed the difficulty of filling the new huge ships. In short, it had been invested in a capacity that did not respond to demand.

This problem, which continues to affect all major shipping companies, is no stranger to Cosco. While you are now concentrating your investment efforts on maritime and rail terminals or finding new sources of income, there are still many obstacles to overcome.

In all safety, Maersk and MSC will not leave their posts without a fight. Cosco may have put in check the two top shipping companies in the world, but both giants also have the Chinese carrier in the spotlight.

Maersk is fully aware of what is to come. Although it is not the first time that the shipping company is challenged, Cosco represents a more serious threat than the previous ones, especially because of the financial strength that sustains it. Maersk has traditionally been a great force to consider in the industry that moves the world. And he will not give up and give up his domain without further ado.

Friends and rivals

Before he can approach his goal, Cosco will still have to pass in front of his other big rival, and Maersk's partner in the 2M alliance. The MSC shipping company has also worked hard to reach its current position and underwent a profound transformation in the last decade, continuing to move closer to Maersk. There is no doubt that he will continue to push and try to reach the Danish giant.

Within the political arena, there are many obstacles that could be placed in Cosco's career toward world leadership. It is necessary to consider possible blockades of countries that may limit their trade relations with China, for fear of the country's economic domination. The current trade war is added to the equation, whose effects could be one of the major obstacles to Cosco's supremacy. At the end of the day, we are talking about the shipping company in effect on a route that is going through moments of maximum uncertainty.

One last challenge that Cosco will face in its rise is that of cyber security. The ransomware attacks suffered by Cosco and Maersk showed the weakness of the systems of the large shipping companies. Therefore, anyone wishing to become the world's largest shipping company should invest in their security systems and not forget that the title will also become one of the most coveted cybercrime goals.

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