MSC liner boss addresses ‘container crunch’ at LISW headline conference

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Mediterranean Shipping Company CEO Soren Toft, who oversees all the group’s cargo operations, tackled the ongoing global ‘container crunch’ and supply chain congestion head-on in his virtual keynote address to the London International Shipping Week headline conference held at the IMO HQ today. (Pictured.)

The situation of ships queuing up outside West Coast US ports was grabbing all the headlines, he said, but MSC ships calling ports across the world were experiencing typical waiting times of “easily 3-5 days” meaning the company had to deploy far more ships than was strictly necessary.

However, the “mediocre” liner returns of recent years have led liner companies to run their fleets at around 90 – 95% capacity, he continued, meaning there is now very little slack on offer to provide the required cover. “Frankly we are unable to offer the services our clients expect,” he admitted.

Nevertheless, MSC has introduced nine new services connecting continents in the last 10 months, he pointed out, yesterday adding two more.

Looking ahead, Toft said he expected the current crunch to normalise “some time during 2022”. But with global GDP predicted to grow by 6% this year and by nearly 5% next, he felt the world economy had now entered a phase of “solid demand growth” rather than merely being Covid recovery related and that “it was not going to be easy” for liner companies to keep in step.

To meet future demand growth, new ships would need to embrace digitisation, to achieve “greater effectiveness and efficiency”, he stressed, as well as decarbonisation where “the real bottleneck will be [availability of] carbon neutral fuels at scale,” he added. MSC itself had already consumed 850,000 tons of biofuels in 2020 and plans to increase that amount this year, he added, and “fully supports” introduction of a market mechanism to encourage decarbonisation.

Toft ended by calling for an industrywide R&D effort into alternative fuels under IMO leadership. “What we need is scalable fuel,” he said. “Let’s put money into R&D for the right solution.”