Cosco's ambition to outdo Maersk and win the title of the largest shipping company in the world is no secret. The Chinese company wants to dominate the world and its intentions should not be neglected. They are closer to warning than to mere lust.
At a time when the shipping industry moved between mergers and acquisitions because of the prolonged economic crisis, the state merger of China Shipping and China Ocean Shipping was a matter of survival. It turned out, however, that Cosco proved to be much more effective in managing the maritime affairs of his country than its predecessors.
The number of investments and expansion Cosco has experienced over the past two years proves the determination and urgency of its plans. However, to understand the scope of your ambitions, you should observe the forwarding company's movement from a wider perspective.
Help in Beijing
While Cosco openly declares its intention to cross Maersk, its long-term goal may be another of greater importance. Thanks to the financial support of the Chinese government, the transport company seems to share the aspirations of the Asian power to become the leading economic force in the world. And of course, Cosco's growth potential is huge, having the largest market in the world at your feet.
The transport company moves slowly but definitely. This year, the purchase of OOCL catapulted him to the third place in the ranking of the largest shipping companies, behind Maersk and MSC. After this operation, more than half of the vessels and capacity in the TEU (20 feet equivalent) of the Ocean Alliance were under their control, cementing their domination in the alliance.
On the other side of the world, Cosco continues its expansion 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 step was the first strategic introduction of a Chinese shipping company in North West Europe, if we consider moving from a larger scale, it was simply the last in a series of acquisitions in Europe in recent years. And only a small part of the great Beijing project that is supposed to physically connect the Asian and European continent. In fact, it is estimated that China currently has around 10% of the total capacity of the European port.
Deciding on the next steps, the transport company faces the challenge of maintaining a strategic vision by choosing a path that it can maintain. Thanks to the support of the Chinese government, their financial options are intimidating, and one of the alternatives is to open the way to investment crises. But the key question is: would he be able to maintain this path?
Because investing is something else and getting something else. In the last decade, transport companies have invested a lot to increase the size of their vessels. Later, the industry witnessed difficulties in filling up huge new ships. In short, it was invested in capabilities that did not respond to demand.
This problem, which still affects all major transport companies, is no stranger to Cosco. Although you focus your investment efforts on sea and rail terminals or search for new sources of income, you still have many obstacles to overcome.
For security reasons Maersk and MSC will not leave their positions without a fight. Cosco was able to check the two main shipping companies in the world, but both giants also have a Chinese operator in the spotlight.
Maersk is fully aware of what awaits us. Although this is not the first time a transport company has been questioned, Cosco is a more serious threat than the previous one, especially because of the financial strength that serves it. Maersk has traditionally been a great force to consider in an industry that moves the world. I will not give up and give my domain without further ado.
Friends and rivals
Before he can get closer to the goal, Cosco will have to pass before his second big rival and Maersk's partner in the 2M alliance. The MSC shipping company has also worked very hard to achieve its current position and has undergone a profound transformation over the last decade, at the same time getting closer to Maersk. There is no doubt that he will continue to push and try to reach the Danish giant.
There are many obstacles in the political area that can be found in Cosco's career towards global leadership. It is necessary to consider possible blockages by countries that could limit their commercial relations with China, for fear of economic domination of the country. The current trade war is added to the equation, the effects of which may be one of the greatest obstacles to the supremacy of Cosco. At the end of the day we are talking about the prevailing shipping company on the route, which is experiencing moments of greatest uncertainty.
The final challenge that Cosco will face is cyber security. Ransomware attacks suffered by Cosco and Maersk have shown the weakness of large shipping companies' systems. Therefore, anyone who wants to become the largest shipping company in the world should invest in their security systems and not forget that this title will become one of the most desirable goals of cybercrime.