Drewry: Container Shipping World Shrinks amid Mergers, Acquisitions

Image Courtesy: Hapag-Lloyd

Shippers could face fewer choices and higher rates in the long run as the container shipping world continues shrinking due to an increase in merger and acquisitions and carrier failures, according to shipping consultancy Drewry.

Following Hanjin Shipping’s filing for court receivership, the container carrier may continue as a regional Intra-Asia carrier if its survival plan is successful, but its days of being a leading global player in the Top 20 are over, Drewry said.

Other brands that have effectively disappeared from the upper echelons of carrier rankings this summer include China Shipping Container Lines (CSCL) after its merger with Cosco, while Singapore-based container shipping company APL and United Arab Shipping Company (UASC) are now merely sub-brands within larger companies after deals with CMA CGM and Hapag-Lloyd, respectively.

Drewry said that, if both APL and UASC are included within their new parents, the Top 5 ocean carriers now control approximately 54% of the world’s containership fleet.

Back in 2005 that share was around 36% and while the trend for greater concentration has steadily been rising over the past 10 years it was the recent M&A activity that pushed it past the 50% threshold.

“This trend will continue as the leading five carriers have the largest orderbooks and, as history has shown, the biggest appetite to acquire other carriers,” according to the shipping consultancy.

Ultimately, this will mean less competition for shippers to choose from. Economic principles suggest that fewer competitors should mean higher prices or the risk of higher prices, although container freight rates have yet to follow this dictum.

Share this article

Follow World Maritime News

In Depth>

Events>

<< Jul 2017 >>
MTWTFSS
26 27 28 29 30 1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30
31 1 2 3 4 5 6

Global Liner Shipping Asia Conference

Fight. Survive. Thrive. Respond to challenges of consolidation & disruption at the largest gathering of container shipping industry in Asia…

read more >

Bunkering Week 2017

IBC’s biennial Bunkering Week is back with its successful series of 3 co-located events: 8th Bunkering in Asia, 4th LNG Bunkering and EMTECH: Ship Emissions Technology Conference. With a proven track record of bringing together top decision makers from various industry sectors, this remains the go to event for ship owners, fuel suppliers, traders and […]

read more >

Indonesia Marine & Offshore Expo (IMOX) 2017

Indonesia Marine & Offshore Expo (IMOX) 2017, Batamis an international maritime and offshore industrial event that brings an international…

read more >

Salvage & Wreck Asia

Could your business be affected by shipwreck? Are you a salvage professional or a wreck removal expert? …

read more >