Heads of several of Asia’s largest shipping lines have commented on the viability of mergers in the fragmented container sector once the financial turmoil on the market has subsided.
Maersk Line’s Asia Pacific chief executive Jesper Praestensgaard said the current focus must be on customers and managing costs but that “longer term I do think we’ll see consolidation”, reported Lloyd’s List.
The sector was fragmented with high costs and competition and low margins, he said. He pointed to current shipping alliances as an indication scale was important.
“When you add it all up, yes there will be consolidation. The $20bn question is when and who drives it? I do see more consolidation but I don’t see it now,” Mr Praestensgaard said at the Sea Asia conference in Singapore.
“Consolidation sounds like a viable solution,” agreed APL President Eng Aik Meng, but said lines needed to remember operating and asset risks increasing fleet size.
“The crisis has underscored the need for financial responsibility,” Mr Eng said, adding that carriers “needed to get away from (the focus on) market share and volume growth” and rather adopt a “careful expansion plan”.
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