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Liner consolidation on the horizon for regional, niche carriers

According to recent media reports, at a presentation at the JOC TPM 2018 conference in Long Beach last week, Seaintelligence Consulting suggested that although consolidation among the largest carriers is likely coming to an end, smaller, niche carriers are just getting started.

The container shipping industry is “near end game for consolidation among major carriers,” but perhaps as many as 30 percent of the 100 largest regional or niche carriers may disappear in the next five years due to mergers and acquisitions.

The consultancy firm also forecast that while there may be an upturn in freight rates this year and in 2019 as a result of tightening capacity, a downturn in the industry in 2020 seems likely as additional capacity enters the world fleet.

Container shipping is dominated by seven global “super-carriers,” which include Maersk Line; Mediterranean Shipping Co (MSC): CMA CGM; COSCO, Hapag-Lloyd; the Ocean Network Express (ONE); and Evergreen Line. These carriers have arranged themselves into three large alliances along with Yang Ming and Hyundai Merchant Marine (HMM).

With mergers among the largest carriers expected to end soon, consolidation among smaller carriers – where 15 of the top 50 carriers have disappeared in the past five years – is expected to rise.

Seaintelligence Consulting’s ceo, Lars Jensen reported that many niche carriers are increasing the size of vessels they are operating. While that may make them more efficient, they are bringing in too much capacity and “there is not enough room for all of them to play the scale game.”

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