Hamburg Süd joins UASC as second integrated carrier this week

Hamburg Süd joins UASC as second integrated carrier this week

Hamburg Süd is officially part of the Maersk Group. Photo credit: Hamburg Süd

The second container line integration was completed this week with Hamburg Süd becoming a subsidiary of Maersk Group on the same day Hapag-Lloyd finalised its merger with United Arab Shipping Company.

Hamburg Süd, however, will remain a commercially independent carrier under its new Danish owner, and although its service network will be greatly expanded, the shipping line will retain its own sales force, customer service, and auxiliary departments such as information technology (IT), human resources, finance, and accounting.

“Under this new umbrella, we can strengthen Hamburg Süd’s position worldwide in a challenging market environment, improve our market position, and offer our customers many advantages,” said Arnt Vespermann, Hamburg Süd’s new chief executive officer.

Vespermann takes over from previous chairman Ottmar Gast, who initiated the $3.7 billion deal at the end of 2016. Gast will continue to be closely associated with the company in the future as chairman of the advisory board. Frank Smet is the chief commercial officer and Jakob Wegge-Larsen is the new chief financial officer.

Hapag-Lloyd wrapped up its integration with UASC six months after starting the merger process. The German carrier now offers 125 liner services in a global network, and beginning in 2019, the company expects annual synergies of $435 million as a result of the UASC merger. “Already in 2018, we will benefit from the merger of the two shipping companies due to significant cost reductions,” said Hapag-Lloyd CEO Rolf Habben Jansen.

Hapag-Lloyd merged with UASC on May 24, 2017. Unlike the Maersk integration of Hamburg Süd, within six months, the operating businesses, the IT systems, the different fleets, and the corresponding departments and country organizations were brought together under Hapag-Lloyd.

Regulators around the world have been keeping a close eye on the merger and acquisitions activity, particularly that of Maersk, the world’s largest container line. China regulators agreed to allow Maersk Line to proceed with its acquisition of Hamburg Süd, although Maersk had to pledge “not to extend Hamburg Süd’s membership of a [vessel-sharing agreement (VSA)] currently active on the Far East Asia–West Coast of South America [ECSA] trade route.”

Additionally, Maersk Line was ordered to withdraw Hamburg Süd from a Far East Asia–ECSA VSA at the earliest possible time, and Maersk must refrain from entering into any VSA deals with its main competitors for a period of five years after the closing of the deal.

The acquisition puts the Maersk Group in a strong position on the north-south trade between the United States and Latin America. Maersk Line, SeaLand, and Hamburg Süd combined controlled 14.1 percent of the trade in the first eight months of the year, which is the same amount it controlled in the corresponding period of 2016, according to PIERS, a sister product of That 14.1 percent ranks just behind Mediterranean Shipping Co.’s 14.3 percent market share and above Seaboard’s 10.9 percent share.

The three Maersk Group carriers had a 13.6 percent market share of imports and 14.5 percent of exports. The carriers’ combined share of imports ranked at number two, again behind MSC, and their share of exports was the largest.

In addition to the restrictions China has placed on the two carriers, Brazil mandated that Maersk sell its ECSA coastal carrier Mercosul Line to win its approval for the tie up. CMA CGM is now in the process of acquiring the Brazilian carrier and is expected to seal that deal early next year.

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