Further consolidation is likely within Asia's container shipping trade this year as lines face a prolonged trade slowdown and depressed freight rates, Bloomberg reports.
With capacity in excess, firms will continue joining forces to cut costs and improve efficiency, the heads of AP Moller-Maersk A/S and Hyundai Merchant Marine Co told the news agency.
“It will be another difficult year,” Hyundai Merchant Chief Executive Officer Yoo Chang-keun said. “Global shipping companies are preparing for the long battle in the shipping industry through M&As and government support.”
“The old model of growth through acquiring new capacity, building new ships is not working any longer,” Soren Skou, chief executive officer of Copenhagen-based market leader Maersk, said in a Bloomberg Television interview in December. “There are a number of players in our industry that have not been profitable for a long stretch. So I see consolidation continuing.”
Last year saw the collapse of South Korea’s Hanjin Shipping Co, a mega merger among Japanese rivals and the sale of Singapore’s shipping flagship, Bloomberg said.