MSC Added Services & Equipment to Ease Supply Chain Crunch, CEO Says

MSC has been continuously investing to help manage the unprecedented impact on supply chains of the COVID pandemic and port congestion problems, CEO Soren Toft told the IAPH World Ports Conference in a keynote interview on the Essential Role of Container Shipping & Logistics, in which he defended the role of carriers in global trade.

“The supply chain has been under amazing pressure and there are a number of factors contributing to it,” Soren said, speaking in Antwerp, Belgium, on 23 June. “Our company, our industry, has really demonstrated that we could keep supply chains moving despite all the issues.”

MSC has started 8 new services in the past few months, deployed available vessel capacity and provided hundreds of thousands of additional containers to help respond to the huge demand for cargo transportation in an extremely challenging and congested market. Unpredicted wild swings in demand, labour shortages at ports and across trucking networks, as well as a legacy of underinvestment in older port complexes have all contributed to the malaise in the market since Q3 2020.

That situation was compounded by the week-long Suez Canal closure in late March and suspension of activities at port terminals in Yantian, South China in May and June, leaving delegates at the World Ports Conference wondering throughout the week-long digital event how port providers could improve resilience and collaboration during times of market disruption.

Soren said MSC was very focused on minimising supply chain disruption, even if shipping and logistics companies are not the cause of the dislocation in the container market.

“We are continuing to expand our footprint to really meet the demands of our customers,” he said. “I realise from a service reliability point of view we must do better. It is also in our interests, because today we are consuming way too much fuel, we have too many ships in the networks, too many containers, all as a result of supply chains being stretched."

Decarbonisation: actions vs aspirational targets

Despite the comprehensive use of fuel and assets, and a waiting game outside congested ports that has seen MSC suffer around 10,000 days-equivalent of lost sailing time, the company has continued to focus on improving energy efficiency in its fleet of over 600 ships. Better access to port infrastructure for larger, more energy-efficient ships and coordination by ports for standardised shore power plug connections are among the interim measures which would help carriers to keep on improving efficiency, Soren said.

The shipping industry is intensifying its focus on the essential task of decarbonisation. A global approach to policy making and regulation and a worldwide R&D fund, which could amount to $5 billion, or even $10 billion, will be crucial to catalyse the process. Meanwhile, collaboration with energy companies, engine manufacturers and other shipping companies is also key to unlocking the handful of alternative fuels that must be developed urgently at scale.

“When those fuels are there, MSC will also transition to those fuels as quickly as fast as we can,” Soren said. “Our focus is on decarbonising the world, less on identifying a target.”

Digitalisation: customer needs

Referring to another key trends of the coming years, Soren – whose keynote followed an earlier interview with MSC Chief Digital & Information Officer Andre Simha on the worldwide deployment of the eBill of Lading – also referred to the key topic of digitalisation as a major “mission” that will shape the future of the container shipping industry.

Digitising processes to improve operational efficiency and enhancing digital channels to propose new solutions to customers will help to ensure that MSC will continue to be “in continuous evolution” for the years to come, Soren said.