Container Shipping Unlikely to See More Major M&As
The global container shipping segment is unlikely to see more major merger and acquisition (M&A) deals following the latest takeover of Orient Overseas (International) Limited (OOIL) by Cosco Shipping, according to AlixPartners.
With Cosco Shipping needing time to digest this OOIL acquisition in order to achieve all the synergies, other carriers are unlikely to make acquisition moves, as the bigger liners have all played their cards earlier, according to Lim Lian Hoon, managing director, Hong Kong at AlixPartners, reported by MANA correspondent.
“One year from now, there will be six major lines – Maersk, MSC, Cosco, CMA CGM, Hapag-Lloyd and NYK/MOL/K Line (as ONE) – controlling more than 70% of the world’s capacity (taking the orderbook into account),” Lim said.
“The remaining three medium sized liners are significantly smaller as Evergreen, Yang Ming and HMM control just 6%, 3% and 2% of capacity respectively.
“Each of the three alliances will therefore have two large liners in them and one small liner, so do either of the two large liners in each alliance feel there is a need to acquire another small liner?” Lim questioned.
The 2M alliance includes Maersk Line and MSC, plus the smaller Hyundai Merchant Marine (HMM) which is a non-member but entered into strategic cooperation for slot exchanges and slot purchases.
Ocean Alliance comprises of the larger CMA CGM (which acquired NOL/APL) and Cosco Shipping, plus the smaller Evergreen.
The third alliance, THE Alliance consists of the larger Hapag-Lloyd (including UASC), and Japan’s ONE, plus the smaller Yang Ming.
Lim pointed out that the present consolidated landscape of container shipping has pointed to a further step in curbing the liners’ habit of chasing market share individually.