I have speculated in recent weeks about the possibility the container industry will see consolidation in 2012.
This is based on the idea that Maersk will ultimately succeed in persuading smaller carriers that it’s better to get out of Asia-Europe if they can’t keep up, that is, by deploying mega ships at a scale that will allow them to compete on unit cost with ships like Maersk’s coming 18,000 Triple class vessels.
With the carriers getting pummeled on rates and in their financials in the second half of this year, and with Europe now possibly in recession, the time would seem to be nearing for something to happen. Recent weeks have seen speculation on merger of the three Japanese liner companies and the possibility of a bid by APL parent for Hapag Lloyd.
Hua Joo Tan of Alphaliner isn’t convinced of the consolidation scenario .
He has observed that carriers survived the Great Recession, not a small feat. And while a handful of small trans-Pacific lines have withdrawn and CSAV is seeking a strategic partner, the fact that MISC announced last week that it was withdrawing from liner shipping means little as their market share was just 0.3% globally.
Hua Joo seems no more convinced now that consolidation is coming. He had this to say this week:
“I maintain my view that there is limited potential for consolidation in 2012,” he wrote in an e-mail response. “The Japanese carriers will need to find the political will to get together and I doubt such courage is forthcoming. The MSC/CMA CGM partnership is a loose alliance structure involving a limited number of trade lanes. This hardly counts as a consolidation move.
The NOL/Hapah-Lloyd (merger) talk is a little premature, as NOL is not in any hurry to put in a bid. TUI on the other hand is in a hurry to get out, and I suspect the recent speculation is aimed at pushing Albert Ballin to be more receptive.”
TUI, the German travel group, said it plans to sell its remaining 38.4% stake in Hapag-Lloyd in January after selling a majority stake to the Hamburg-based investment group Albert Ballin in 2009.