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During 2016, several ocean shipping companies & container lines announced a series of mergers and alliances to improve efficiency, resolve their financial woes and address the industry’s oversupply conundrum. The consolidation story dates back to 2015 and has unfolded throughout the year. So as we near the end of 2016 and consider the ocean shipping landscape in the year ahead, the picture is now coming into focus.

The major carrier mergers & acquisitions announced in 2016 include the following:

  • Hapag-Lloyd & United Arab Shipping Company (UASC) – Will make Hapag-Lloyd the world’s fifth largest container line with a market share around 7%
  • CMA CGM & Neptune Orient Lines (a.k.a. American Presidential Lines/APL) – Will give CMA a 6% market share.
  • China Shipping & Cosco – Will give combined entity a 7% market share.
  • Maersk & Hamburg Süd – Will give Maersk a 9.7% market share.
  • Japanese Carriers’ Merger (i.e. Mitsui O.S.K. Lines/MOL, NYK Line and “K” Line – Representing a combined 5.2% market share.

Ocean carriers are optimistic that such industry consolidation will lead to better asset utilization, lower operating costs and a reduction in the oversupply of vessel capacity.

Along with these major carrier mergers, new container shipping alliances are also forming. The industry is now coalescing around three main carrier alliances who are relatively equal in size and market share.  These three major alliances are:

  • 2M Alliance – Maersk, Mediterranean Shipping Company (MSC) and Hyundai Merchant Marine (HMM). The 2M Alliance has been in place since July of 2014 and HMM has only recently joined in a deal where they will share surplus capacity and purchase cargo slots with MSC and Maersk starting in April 2017.
  • The OCEAN Alliance – Formed in April of 2016 as an answer to the 2M Alliance by fierce competitors Orient Overseas Container Line (OOCL), Evergreen, China Cosco Shipping, and CMA CGM.
  • THE Alliance – Comprised of Hapag-Lloyd, Yang Ming and Japan’s three big shipping companies (i.e. MOL, “K’ Line and NYK). THE Alliance was formed in the aftermath of the carrier alliances realignment and was formed to obviously rival the 2M & OCEAN Alliances.

The impact of these new alliance structures will be felt throughout the ocean shipping market. It is important for shippers to keep abreast and aware of carrier service implications, developments, overall financial health and market/pricing changes.   Read more at:

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