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Shipping’s largest sector - dry bulk - has experienced some very significant merger moves in recent months, which many believe is just the start of a period of consolidation for the highly fragmented industry. Dry bulk remains the least consolidated of all the merchant shipping segments, with the largest listed dry bulk concerns having no more than 14m dwt of a total fleet that numbers some 1bn dwt today. Nevertheless, some headline-grabbing deals in recent months point to changes in the segment. First there was London-listed Taylor Maritime Investments takeover of Grindrod Shipping, followed by the mega merger news between US-listed pair Star Bulk and Eagle Bulk and ending up this month with the news Cetus Maritime has moved to take over Chile’s Nachipa Corp, one year after the creation of Cetus via the merger of Asia Maritime Pacific and Hamburg Bulk Carriers. On a smaller scale, there has also been Croatian takeover news between Tankerska Plovidba and Atlantska Plovidba. In 2024, scale counts “In 2024, scale counts,” commented Tim Huxley, chairman of Hong Kong shipowner Mandarin Shipping. Huxley described consolidation as positive and inevitable in today’s volatile markets. “Despite being an asset intensive business, dry bulk shipping is a fairly free economy, with low entry barriers and a high number of competitors,” said Olivia Lennox-King, who as chief operating officer at Cetus Maritime has been one of the architects of the ongoing consolidation in the sector. The geared dry bulk space is extremely fragmented and the majority of owners have one or two ships. Some 1% of geared shipowners own more than 1m dwt in tonnage, while about 75% own less than 100,000 dwt. Kenneth Koo, chairman of another Hong Kong owner, TCC Group, said consolidation suited today’s increasingly transactional nature of shipping. “Ships are being ordered with a mindset that has departed completely from the traditional days of tying the ship with a long-term business relationship,” Koo said, suggesting merging was a healthy trend overall. “Management practices and standards will also become more unified,” Koo argued. John-Michael Radziwill, the CEO of Monaco’s C Transport Maritime (CTM), has been a vocal proponent of consolidation in the dry bulk market for years. “It brings economies of scale and synergies as well as improved information flows and better negotiating ability,” he said in conversation with Splash Extra, adding: “We think this trend will continue and we’ve seen big names consolidate/merge in the last couple of years as it can bring many advantages to the larger consolidated entity such as bring down costs with G&A spread over a larger fleet and reduce operating expenses through the achievement of synergies and logistics optimisation. With cost rising across the board, in our view consolidation makes even more sense today.” Having been active in the pooling sector for over 25 years, Radziwill said he had come to the conclusion that a fleet size exceeding a certain threshold in any given sector typically leads to better performance vis-à-vis the relevant indices. Consolidation can have different drivers, observed Mark Williams, founder of UK consultancy Shipping Strategy, who described Star Bulk’s acquisition of Eagle Bulk as well-timed, being near the bottom of the cycle. “Listed shipping companies have to scale up and keep the deal flow churning to support the share price and liquidity,” Williams said, a point also picked up by Øystein Vaagen, a partner at Fearnleys Securities. Getting increased liquidity, higher market caps and noticed by general investors would likely lead to other companies seeking out other acquisitions, Vaagen told Splash Extra. “You will see these opportunistic trades because of the positive outlook in the sector,” he said, noting how dry bulk is far more cash-rich than it has been for more than a decade, and expansion via newbuilds entails delivery waiting times going into 2026 and 2027. There is also the issue of increased regulatory oversight of shipping. “The financial burden of regulation can be proportionally larger for smaller companies,” said Williams from Shipping Strategy. “Scale can help with ESG issues which in turn makes it possible to continue to access finance, which increasingly comes with ESG conditions.” Concluding, Lennox-King from Cetus Maritime reckoned that while necessary, she was not sure consolidation would continue apace. “There is a natural ceiling,” she said. “Mergers and corporate consolidations are notoriously difficult to execute and then to maintain.” Another hurdle somewhat unique to shipping is self-interest. “Shipowners are well-known for looking for a competitive advantage and short-term gains, which does not lend itself to compromise and the longer-term view required in a corporate consolidation,” Lennox-King pointed out.

Dry bulk seen entering period of consolidation

More mergers are on the cards for shipping’s largest and most fragmented sector

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