The container industry is heading towards being in the hands of a few major companies after more takeovers and consolidations have taken place.
The latest merger is OOCL becoming part of COSCO which itself owns China Shipping. The Chinese state cabinet approved the merger of COSCO and China Shipping back in December 2015. China COSCO Holdings have the largest fleet on order with 29 ULCVs and 4 post-panamax containerships. The Chinese owned container fleet is the most valuable at $17.6 billion. This will increase the capacity of the Ocean Alliance which already boasts CMA CGM and their recent acquisition Neptune Orient Line who themselves own APL. Tawainese operator Evergreen is also part of the Ocean Alliance.
Maersk has paid roughly $4 billion for Hamburg Süd whose fleet is worth $1.5 billion. The deal is was completed at the end 2017. Entry of Hamburg Süd into the 2M alliance will put the alliance into the lead with 15% of global capacity. This will put the 2M Alliance in the lead of all container Alliances with 15% of the global market.
Hapag-Lloyd completed their integration with Chilean line CSAV earlier this year to join UASC in their Alliance.
Perhaps the most interesting of the mergers in hand is that of the proposed consolidation of the three major Japanese companies NYK, MOL and K Line. Nearly 2 years ago this alliance was proposed forming Ocean Network Express. But all did not go according to plan. South Africa’s competition authority rejected the proposed container division merger between Japan’s three largest carriers just days before the new joint venture Ocean Network Express was expected to be formed. NYK, MOL, and ‘K’ Line planned to form the new joint venture entity once all the anti-trust reviews had been successfully completed.
The Competition Commission of South Africa considered the impact a merger would have on the market and ruled against the proposal. It said a merger would affect the provision of container line services as well as the car shipping market in which the carriers compete.
“The Competition Commission of South Africa has prohibited the proposed intermediate merger whereby NYK, MOL, and ‘K’ Line intend to merge their container liner shipping businesses to form a joint venture in that market,” the Authority said in a statement.
This is a second setback for NYK, MOL, and ‘K’ Line after the US Federal Maritime Commission in May last year was unable to approve the merger on jurisdictional grounds. The FMC voted down the carriers’ proposed “tripartite agreement”, saying the Shipping Act of 1984 did not provide them authority to review and approve mergers. However, the new alliance would appear to have overcome all these issues and is due to start on 1st April.
What a change from the post-war freight companies who ran very effectively as small entities. Ah well, they say this is progress!the