POOR first half results in container shipping in the first half make it more likely that more merger activity can be expected, says London's Drewry Maritime Research.
First half revenue from Maersk, Hapag-Lloyd, MOL, NYK, OOCL, and "K" Line, was down by 18 per cent on average, notes Drewry's Container Insight Weekly.
If this persists for a full year, carrier income would fall US$29 billion against 2015, below the record lows of 2009, said Drewry analysts.
"With carriers waving goodbye to likely more than $50 billion of sales in two years since 2014 - in 2009 the sales reduction was about $66 billion in just one year - it should be no surprise that most of the big players are losing money and that some are close to the financial abyss, or that a number of lines are merging in order to better prepare for such hard times," Drewry said.
After years of little M&A activity, there has been much recent action such as the merger of Cosco and China Shipping, French carrier CMA CGM buying NOL/APL, and Germany's Hapag-Lloyd merging with UASC, reports Lloyd's Loading List.
Said Drewry: "On top of all that, carriers have developed bigger alliances to pool their resources and try and find more cost savings. All of these moves are defensive strategies forced upon carriers by the weak state of the market."
Source: SchednetPrevious Next