Despite the planned merger of Japanese con[ds_preview]tainer operations, the industry needs further consolidation, according to analysts from Maritime Strategies International. In their view, more and more mid-sized lines might disappear.
MSI´s latest »Container Shipping Forecaster« focuses the contrasting fortunes of liner operators and tonnage providers. »Whilst freight rates have improved marginally from the extreme lows seen over the middle of the year, most liner companies are now at best breaking even, with weaker lines still probably in a loss-making position. The situation is even worse for charter owners, with vessel earnings marooned below operating costs for most mid-sized vessel classes«, it is said.
However, there would be a considerable variation in the extent to which market participants are in control of their own destinies, with liner companies better able to take decisive action to improve their situation whilst charter owners are largely price-takers with few options to improve either their market position or revenues according to James Frew, Senior Analyst at MSI.
»Whilst the operator side of the liner industry continues to be wracked by convulsions and consolidation, the tonnage provider space seems to be slowly sinking ever deeper into the mire. Containership tonnage providers are at the bottom of the food chain, as ultimately liner companies can intermediate the supply of liner shipping capacity to shippers, and push excess capacity back onto the charter owners.«
The liner operator landscape continues to respond to dire circumstances, but as Frew notes, plans by the three Japanese liner companies to merge their operations reflects a trend that asks questions of the remaining midsized operators. »In broad terms, we regard the liner companies with sufficient scale to compete on a global level being Maersk, MSC, CMA CGM, COSCOCS, Hapag Lloyd, the Japanese and Evergreen. Where this leaves other companies is something of a parlour game but further consolidation appears inevitable. In the new world of consolidated liner companies it is increasingly hard to see a future for mid-sized lines.«
