The relatively inelastic nature of the demand for shipping services traditionally constitutes a core problem for the financial performance of container shipping lines. After the financial economic crisis
of 2008-2009, container shipping entered a period of depressed freight rates and low or negative operating margins, partly caused by the
overcapacity situation in the market. The reshuffling in strategic alliances and a major consolidation wave in the period 2014-2017
initially did not bring major changes. The COVID-19 pandemic seems to present a turning point for the liner shipping industry. Effective
capacity management by carriers (i.e., blank sailings) made that freight rates did not erode in the first half of 2020. Since the Summer of 2020,
cargo volumes are surging because of both inventory restocking and increased consumer confidence driven by vaccines and stimuli.
Growing demand has led to capacity shortages in terms of boxes and ships resulting in steep increases in both the freight rates and carrier
profitability. For example, the composite Shanghai Containerized Freight Index (SFCI) stood at a record 4,100 in late July 2021, while this index fluctuated between 500 and 1,000 in the period 2016-2019. The average operating margin in the liner industry reached an elevated 38% in Q1 2021 while it stayed within the +5%/-10% bandwidth throughout the period 2011-2019.

The COVID-19 pandemic is having an impact on market structure. Quite a few shipping lines are using their strong financial position and high credit ratings to place more vessel orders and expand their portfolios by acquiring regional niche carriers. MSC (47 ships totalling 852,000 TEU in fleet capacity on order in late July 2021; data Alphaliner), Evergreen, CMA CGM and COSCO are among the major carriers with very large order books, while Maersk Line (orderbook of 46,000 TEU capacity) did not opt for a major fleet expansion. These differences in orderbooks are likely to change the carrier rankings in the coming years, with MSC overtaking Maersk Line to become the largest container line in terms of slot capacity. However, there are no immediate signs that a new wave of mergers and acquisitions will occur among larger carriers in the short to medium term. Regulatory authorities around the world are closely monitoring the situation in terms of market structure, freight rates and available capacity. The
discussion on market concentration in liner shipping will remain high on the agenda, with a specific focus on the role played by the three
strategic alliances (i.e., 2M, The Alliance and Ocean Alliance).

Several container lines use their regained financial strength to intensify their focus on vertical integration through additional involvement in inland logistics and digital transformation while also continuing the greening of their fleets. The pandemic is an opportunity for shipping lines to make a comprehensive review of their business models and revenue management. Several major lines such as Maersk Line have already shifted their core focus from container shipping services to logistics. Finally, the present level of consolidation in the liner shipping (i.e., the top 10 shipping lines
control 91.5% of the total fleet capacity and all belong to an alliance) combined with extremely high freight rates might give new entrants, such as
large e-commerce players and logistics service providers, incentives to consider a direct involvement in container shipping.