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More mergers likely as smaller carriers struggle to keep up

THE widening gap between medium-size shipping lines and bigger ones has prompted Drewry Maritime Research to expect a new wave of mergers soon.

The merger of the container businesses of "K" Line, MOL and NYK will push the new Ocean Network Express (ONE) into fifth place in the global rankings, with a combined capacity of 1.7 million TEU, after taking into account their orderbooks, according to Drewry.

Hapag-Lloyd is sixth, with 1.6 million TEU, and with its orderbook included, Drewry said. Evergreen becomes the seventh-ranked carrier with 1.3 million TEU.

There is a substantial distance to the eighth-biggest carrier, OOCL, with 769,000 TEU of capacity, and ninth-placed Yang Ming with a fleet of 708,000 TEU, reported London's Loadstar.

In terms of market share, Maersk Line continues to dominate with 18.4 per cent, based on its fleet size and orderbook of 4.2 million TEU, followed by MSC with 13.5 per cent, on 3.1 million TEU, and CMA CGM with a capacity of 2.4 million TEU, giving it a 10.4 per cent share.

Drewry notes that the top three container lines, again with orderbooks included, now enjoy a massive 42 per cent dominance of the global container market, which compares with the 26 per cent share held by the top three carriers in 2005.

CMA CGM's acquisition of APL, the merger of Cosco and CSCL, Hapag-Lloyd's merger with UASC and the forthcoming takeover of Hamburg Sud by Maersk has resulted in a widening of the chasm between the big players and their mid-sized peers.

"Inevitably, as the gap between the leading seven carriers and everyone else gets wider, speculation will mount about whether the smaller players can keep up and remain cost-competitive," said Drewry.

It noted that OOCL had recently been linked to a takeover by Cosco, and that the "financially troubled" Yang Ming had been obliged to consistently provide updates on its financial status and bat away suggestions of a merger with its bigger Taiwanese compatriot, Evergreen.