There’ll be just six to eight global container carriers by the mid-2020s, a leading box analyst told participants during a live Q&A on Splash Chat today.
Lars Jensen from Copenhagen’s SeaIntelligence Consulting made the prediction in a specially convened forum to discuss the sector in the wake of last week’s demise of Hanjin Shipping – the largest bankruptcy in container shipping history.
For Jensen, who also writes for Splash sister title Maritime CEO, this is not the first time he has made this statement. He first posited the theory back in 2011 when there were 20 global carriers. Since then the number has technically decreased to 15, via mergers led by Hapag-Lloyd and CMA CGM and last week’s Hanjin announcement.
“Until recently, we had a structure with a large number of small niche carriers, and a large group of global carriers – and two carriers materially larger than everyone else,” Jensen noted during the 30-minute session. “Now we are going into a new era,” he continued. “There’s still a lot of small niche carriers. We also have an emerging elite of five very large carriers – six if you include Evergreen, and an increasingly small middle group of small global carriers. This will change the competitive dynamics,” he asserted.
Inevitable further consolidation among global carriers was a point of view shared by Andy Lane, partner at box analysts CTI Consultancy. “15 individual entities all offering the same product at the same price is probably not sustainable,” Lane told the forum.
On freight rates, most participants were agreed that the worst is likely over and they have bottomed out.
Returning to the hottest container news of the day – the fallout from Hanjin’s bankruptcy, Jensen said: “It may well be that Hanjin will survive eventually as a carrier, but then most likely as a small niche carrier and nowhere near the global carrier it has been. We will be witnessing the other global carriers fight for Hanjin’s deepsea market shares.”
Splash Chat is our interactive forum where readers can debate key news items breaking. Watch out for more live Q&As in the coming weeks.