According to online freight forwarder iContainers, mergers and acquisitions activities for shipping carriers are expected to decrease in 2018. On the other hand, freight forwarders can expect to see an increase in M&A talks.
Because of market downturn, many carriers formed alliances and set agreements on slot purchases, gaining cost-effectiveness. Such movements affected shippers.
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SeaIntelligence Consulting’s CEO, Lars Jensen said also that the limited number of supercarriers left make any further major consolidation efforts unlikely.
Long term, Hyundai and Yang Ming are not going to be viable in their present states. They’re too large to become niche carriers and too small to become super carriers. They will transform or disappear in some way, shape, or form. Yang Ming is likely to be absorbed into Evergreen, even though Evergreen hates the idea. Hyundai will persist as long as the Korean government wants to subsidize them. And eventually, they might tire of that.
This development may benefit smaller carriers, where many small and medium sized carriers will be starting to stir and probably where the consolidation game will ramp up over the coming years.
However, freight forwarders are likely to increase their M&A activities, for strategic growth purposes. Klaus Lysdal, Vice President of Sales & Operations at iContainers, explains:
We could see the mid- and large-ranged forwarders acquire tech-savvy companies as a shortcut into the digital market, then add additional services to their portfolio. This gives them more of a headstart and a foundation to start from rather than build their own set up from scratch. I think we will see that the top players will be watching and observing from the sidelines for a while. Once they see someone really make a breakthrough, that’s when they make their move.
