Mergers on horizon for Asia shippers

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Luisa Cheshire

BY LUISA CHESHIRE

Mergers on horizon for Asia shippers

Asia's container shipping lines are set for more mergers this year in a bid to improve efficiency in difficult conditions, leading shippers warn

Mergers on horizon for Asia shippers

2016 saw the collapse of Hanjin shipping

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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. 

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