It took 50 years, but now Gianluigi Aponte, the secret shipping magnate, is about to rise to the top. The Italian businessman’s Mediterranean Shipping Company, which he founded half a century ago, is poised to take the crown as the world’s largest container group, surpassing AP Moller-Maersk.
Having poached one of its Danish rival’s top executives and allowing an outsider to take on a leadership role for the first time, the family group seeks to consolidate its position at the heart of global supply chains.
“I think it’s a perfect opportunity to bring the best of both worlds together,” Soren Toft, who joined the private company as CEO in December after 25 years at Maersk, told the Financial Times.
“It’s about taking my experiences, my knowledge and my foresight and combining it with the great attributes of MSC. . . we are privately owned, we have the long lens. “
Toft may have come at the right time to grow the Italian-Swiss group, which has embarked on an aggressive expansion as it takes advantage of the pandemic that has generated record profits for shipping lines thanks to higher rates. of freight caused in large part by the boom in online shopping.
The profitable run of the shipping lines follows more than a decade of overcapacity that forced consolidation and capacity-sharing alliances.
Although Toft insists that “we are not bothered by the size”, the company has bought about 60 second-hand vessels since August with 43 new orders, according to the consulting firm Alphaliner, in a sign of its opportunism.
MSC is very secretive, but the group’s annual revenue was probably in excess of $ 25 billion before the pandemic, as it is projected to grow more than rival Maersk in terms of capacity with the largest order book for new tonnage.
Described as ambitious, rational and impatient for those close to him, Toft will have to find a balance between his desire to make a mark and sticking with the billionaire owner and his family.
The Apontes have maintained close control over the company’s decision-making and culture for decades as it expanded beyond cargo transportation to cruise ships, terminals, inland logistics, security, and other areas.
The founder and former captain of the Neapolitan ferry has also retained a feeling of maritime family in the group, earning fierce loyalty from his more than 100,000 employees, even sending personalized letters to staff inviting them to ship naming ceremonies, say people familiar with the company.
Another key feature of the company is its extremely short chain of command, with Aponte intimately involved in operational business decisions.
Line managers, used to direct access to owners, meet him and senior family members on Saturday mornings, and now Toft, who shares the 9th floor of MSC’s Geneva headquarters with three family members. Toft can use his expertise at Maersk to help balance family and business interests.
Nearly 30 years ago, Danish shipping magnate Maersk Mc-Kinney Moller gradually withdrew from operating participation as his company became more transparent and transactional. “He’s been on a somewhat similar journey before,” said Lars Jensen, a shipping analyst at Vespucci Maritime.
In particular, Toft is likely to try to make its mark by putting a greater focus on optimizing the global network, rather than focusing primarily on improving each of its 215 trade routes. This is to ensure that products arrive on time and customer needs are met, while ships are as full as possible.
He’s also trying to make the secret company, which has drifted out of the public eye in the past, more outgoing, notably on social media. This move reflects in part the strong focus on shipping due to delays and price increases induced by the pandemic and its impact on the climate.
Freight forwarders, who plan and coordinate routes for shipping freight, and analysts say MSC has a reputation for poor service, despite improving in recent years.
They add that a key priority for the new boss will be to update his outdated IT systems to improve these services and information for clients, which will likely involve large investments.
Digitization is a particular challenge for the company, as it opens the shipping industry to new competitive pressures from freight forwarders using digital technologies and even companies like Amazon and Alibaba.
“The entire uberization of the supply chain is a threat. If someone else provides the space on their boats, then they have to bear the price, ”said Stephen Cotton, secretary general of the International Transport Workers Federation. “They don’t want to be vulnerable to a high-tech company.”
Another challenge for Toft is how to reduce carbon emissions. The group was the sixth largest polluter in Europe in 2020 and only coal plants emitted more CO2, according to the NGO Transport & Environment.
The CEO is taking a more proactive public stance on this, recently warning about EU climate measures on shipping that he says may have the opposite effect of his intention by increasing emissions. He supports a global carbon tax in principle, but believes the industry lacks visibility into when low-carbon fuels will be available on a large scale.
The group has also faced unwanted attention when it emerged that MSC was the largest debtor to Credit Suisse’s $ 6.8 billion main fund linked to Greensill, the financial group collapsed in the supply chain. MSC said there is no material impact of the $ 321 million related to the frozen fund. “It’s a thing of the past, we’ve sorted out whatever it takes,” Toft said.
In addition to Greensill, analysts and bankers speculate on the company’s cruise division, the world’s fourth-largest, and its impact on the group as a whole, as the sector has suffered during the pandemic.
However, the windfall profits for containers this year could make its cruise arm the industry force to be reckoned with, while there is little sign that it will limit the group’s overall ambitions. “We see several areas where we still have a lot of track ahead of us,” Toft said.
Source: Insider-voice.com
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