News / Shippers to opt for direct port calls over speed of service, predicts MSC's Soren Toft

Soren Toft Photo: World Ports Conference 8-10 October 2024 @Richard Langdon

MSC chief executive Soren Toft has predicted that global supply chains will increasingly fragment in the near future, leaving shippers prioritising direct port calls over speed of service.

In a keynote speech delivered this morning at the opening session of the International Association of Ports Harbours (IAPH) annual World Port Conference, Mr Toft explained that the carrier’s recently published standalone 2025 service network reflected a belief that supply chains are undergoing profound change.

“Supply chains are no longer centred around just a few countries, and no longer rely on one or two major markets, but are becoming more dispersed and we believe that requires a broader port coverage in the network.

“We don’t believe that this is due to near-shoring – I don’t think Americans are going to produce their own cups and toys, but we made the decision to walk alone because we have the fleet, but also because it gives us the agility to respond to the challenges in the world.

“I don’t know what the next black swan event is going to be, but I want to be ready for it.

“In our Asia-North Europe services we cover 12 ports in Asia – our nearest competitor covers nine – and in Europe we will be calling at 13 ports and our nearest competitor is seven.

“Altogether we are going to provide 1,900 direct port combinations because we believe that clients want that certainty of a direct destination call, and that direct connections are more important than speed – ours is a network that reflects the future of a more dispersed supply chain,” he explained.

Mr Toft said it was this strategy also underpinned the company’s substantial port and terminal investments.

“The ports enable us to have operational resilience – we don’t invest in them just to squeeze out some profit.

“I like to think of them as like the pit stops in Formula One racing – if we can get out of the ports one of two hours faster that drives efficiency across the while network.

Meanwhile, the acquisition of a 49% stake in Hamburg terminal operator HHLA was approved by EC competition regulators last Friday and now only requires Ukrainian government approval to proceed, as HHLA has a terminal in Odessa. Mr Toft said the deal is set to profoundly change the nature of the port.

“We are really proud to partner Hamburg city in HHLA,” he  said.

“We are committed to the growth of the port and the expansion of HHLA and we want to show Hamburg how serious we are – we have already this year added a couple of mainliners out of Asia to Hamburg and our volumes in the port are already showing double-digit growth.”

Mr Toft also called on the International Maritime Organization (IMO) to expediate its development of decarbonisation regulations – IMO secretary general Arsenio Dominguez was sitting in today’s audience.

“We have a duty to be a responsible company, but we need two things for that – the first is true global regulation, we can’t run a global business with regional regulations, and secondly we need to be pragmatic.

“The real problem with decarbonizing the industry is the availability of fuel, and that’s why we made the decision to go for LNG – it’s available and because there is a pathway from it to even greener fuels such as synthetic LNG,” he said, adding that MSC’s investment in duel-fuel vessel was now over $20bn.