The Danish ocean carrier’s plan to acquire Hamburg Süd in 2017 caps a landmark year for consolidation in the container shipping industry, noted Mario Cordero, the chairman of the Federal Maritime Commission.
Maersk Line’s plan to acquire Hamburg Süd in 2017 caps a landmark year for consolidation in the container shipping industry, noted Mario Cordero, the chairman of the Federal Maritime Commission (FMC).
Next year, most of the container shipping industry will be controlled by 12 carriers operating in three alliances. These vessel sharing agreements include the already existing 2M Alliance consisting of Maersk Line and MSC (with conflicting press accounts in recent days about whether HMM will join); the Ocean Alliance, consisting of CMA CGM, COSCO, Evergreen Line and OOCL; and THE Alliance, consisting of Hapag-Lloyd, Yang Ming, “K” Line, MOL and NYK. The Ocean Alliance and THE Alliance are expected to launch in April 2017.
According to Alphaliner, those 12 carriers operate ships with over 15.8 million TEUs, or 76.5 percent of the world’s 20.7 million TEUs, of liner capacity.
While the FMC does review vessel sharing agreements, Cordero noted the agency has a limited role in deals such as Maersk Line’s plan to acquire Hamburg Süd.
Cordero attended the American Association of Port Authorities’ 25th Latin American Congress of Ports this week in Merida, Mexico.
Both Maersk and Hamburg Süd are major carriers in Latin America, he noted, where Maersk re-launched the Sealand brand in 2015.
He said there was a good deal of optimism about the outlook for shipping in emerging markets in Latin America at the conference. In the 1990s, the goal of many Latin American ports was to be part of the global economy, and with that accomplished, their major emphasis is improving service, getting prepared to handle larger ships, improving productivity and transparency.
Fellow FMC Commissioner William P. Doyle also told American Shipper, “We’ll take it one step at a time as to the appropriate regulatory review by the U.S. I do note that some of Hamburg Süd’s services would appear to complement the new SeaLand that is operating services from all three U.S. coasts and between Latin-South America.”
Lars Jensen, chief executive officer of SeaIntelligence Consulting in Copenhagen, said that the combination of Maersk and Hamburg Süd “is a very good match – the key here is the depth and breadth of the combined network.” Jensen noted how the combination allows for an especially diverse network in Latin America, providing cargo owners with a broad product and reducing overall costs for the combined entity.
“As for regulatory scrutiny, my view is that they must have thought this through, and if there are a few specific locations where this becomes an issue, the solution might be to divest of minor portions,” Jensen said. “I do think that in terms of culture, the two companies are relatively compatible, and given the ‘light touch’ integration announced by Maersk, this should not prove to be a major issue.”
Jensen said for him, “the most interesting parts of this take-over is when seen in combination with all the other consolidation going on. Essentially, the main carriers, will in the next 1-2 years, be competing on their ability to get synergies out of the mergers – a completely different competitive parameter than the ‘usual’ price and cost competition.”
Don Pisano, president of American Coffee Corp. and the chairman of the Ocean Transportation Committee of the National Industrial Transportation League, the nation’s largest shipper organization, said, “It appears that the carriers have created a situation for themselves in which consolidation or participation in vessel sharing agreements may be an actual requirement in order to survive. Our NIT League members want to work with strong and reliable partners focused on service and competitive rate structures. These developments underscore the continuing need for the Federal Maritime Commission and other regulatory authorities around the world to play their vital roles in ensuring that any mergers or VSA participation continues to support a competitive market and adequate carrier choices for shippers.”
Maersk’s plan to buy Hamburg Süd caps active year for consolidation
