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EUROMOVERS International

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No more shipping mergers in 2018

Apr 23, 2018
According to online freight forwarder iContainers, mergers and acquisitions activities for shipping carriers are likely to slow down in 2018.

Following an unprecedented number of mergers and acquisitions over the past few years, iContainers says this trend can now be expected to ebb. “In terms of carriers, I doubt we will see any movements in the near future,” said Klaus Lysdal, Vice President of Sales & Operations at iContainers. “I don’t see any major players breaking right now. Any acquisitions that were to take place now would be a purely strategic move, or if an opportunity presents itself for one of the bigger carriers to buy up a younger one.”

Amid a prolonged market downturn, many carriers resorted to forming alliances and setting agreements on slot purchases. These allowed them to gain cost-effectiveness by combining their resources without risking further debt. “We’ve seen so many consolidation activities that there are now a lot fewer options for shippers to choose from and less flexibility with the number of carriers so dramatically reduced,” explained Klaus.  “But the good thing that has come out of all of this is some very much-needed rate increases to make the industry healthier overall.”

On a special visit to iContainers earlier this year, SeaIntelligence Consulting’s CEO, Lars Jensen remarked that the limited number of supercarriers left make any further major consolidation efforts unlikely.

“We’re now down to only seven supercarriers. I don’t think anything is going to happen up there anymore,” he said. “There might be some that want to merge, but I’m not sure that the competition authorities are going to allow it. Long term, Hyundai and Yang Ming are not going to be viable in their present states. They’

re too large to become niche carriers and too small to become supercarriers. They will transform or disappear in some way, shape, or form. Yang Ming is likely to be absorbed into Evergreen, even though Evergreen hates the idea. Hyundai will persist as long as the Korean government wants to subsidize them and, eventually, they might tire of that.”

Klaus Lysdal believes that the attention might focus on freight forwarders as they engage in their own M&A activity for strategic growth pu

rposes. “We could see the mid- and large-ranged forwarders acquire tech-savvy companies as a shortcut into the digital market, then add services to their portfolio,” he said.

    No more shipping mergers in 2018

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