London, UK — There is a “high likelihood” of a new wave of M&A activity involving medium-size ocean carriers, as the gap widens between them and the largest container lines, according to shipping consultant Drewry.
Drewry notes that the top three container lines, again with orderbooks included, now enjoy a massive 42% dominance of the global container market, which compares with the 26% share held by the top three carriers in 2005.
CMA CGM’s acquisition of APL, the merger of Cosco and CSCL, Hapag-Lloyd’s merger with UASC and the forthcoming takeover of Hamburg Sud by Maersk has resulted in a widening of the chasm between the big players and their mid-sized peers.
“Inevitably, as the gap between the leading seven carriers and everyone else gets wider, speculation will mount about whether the smaller players can keep up and remain cost-competitive,” said Drewry.
The merger of the container businesses of K Line, MOL and NYK will propel the new Ocean Network Express (ONE) into fifth place in the global rankings, with around 1.7m teu of capacity (after taking into account their orderbooks), it said.
In terms of market share, Maersk Line continues to dominate with 18.4%, based on its fleet, including orderbook, of roughly 4.2m teu, followed by MSC with 13.5%, on around 3.1m teu, while CMA CGM’s capacity of approximately 2.4m teu gives it a 10.4% share.
It noted that OOCL had recently been linked to a takeover by Cosco, and that the “financially troubled” Yang Ming had been obliged to consistently provide updates on its financial status and bat away suggestions of a merger with its bigger Taiwanese compatriot, Evergreen, all of which is unsettling for any business.
Drewry agreed that one consequence of the rush of M&A activity over the past two years was that shippers now had fewer and fewer options when booking container space.
This was the “unfortunate price” to be paid for years of sub-economic rates that had forced carriers to “seek safety in numbers”, it said.