Bigger vessels from shipping majors to spark consolidation
Poised to consolidate in the next few years The global container market is poised to consolidate in the next few years as A.P. Moller Maersk and other major shippers roll out bigger vessels, potentially forcing smaller rivals to drop out of an already oversupplied market.Medium-sized container firms warn that a move by the majors to flood the market with mega ships could spark a "rate war" similar to 2009 when the market plummeted and most firms fell into the red in one of the industry's worst downturns."We believe that... the largest shipping companies will continue to expand the scale of economies of the industry," said Thomas Knudsen, Maersk Line's chief executive for Asia Pacific Region, at an industry conference in Singapore."As we drive these scales of economy, it will be difficult for the smaller carriers in these industries to compete. That will drive consolidation."Maersk (MAERSKb.CO), the world's top container shipper which holds a 15 percent share of the container market, is expanding its fleet by around 8 percent annually to keep up with economic growth."We are not doing this aiming at taking market share," Maersk Chief Executive Nils Andersen told reporters at an industry event. He agreed that consolidation would ...
Read moreDetails
