18-06-2016

Drewry sees more M&As as economies of scale sought through consolidation

drewry

LESS revenue for container shipping companies means greater pressure to secure economies of scale through mergers, says London's Drewry Maritime Research.

"With lower revenues becoming the new norm, carriers need to attain a higher scale of operational efficiency to be profitable," Drewry said in a recent report. 

"Those who are slow or fail to achieve this, are either becoming acquisition targets like NOL or becoming marginalised like Korean operators - HMM [Hyundai Merchant Marine] and Hanjin."

Drewry expects poor shipping company results this year and next, which will give greater impetus to further consolidation. 

CMA CGM's acquisition of APL/NOL, the merger of Cosco and CSCL, a probable merger of Hapag-Lloyd and UASC will reshape the liner industry, Drewry said. 

In addition, there are possibilities such as the "merger of three Japanese lines' container divisions". 

Source: Schednet

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