Shipping business survives by consolidations

Container shippingAsian shipping companies can not survive alone, which pushed them to merge. Recently a lot of consolidations are observed in Japanese, Chinese and Korean transport industry, which aims to improve the efficiency and expertise, together by dropping operating costs. Even the large market share of certain companies does not help them much, as among the biggest five in the shipping business are invariably European transport companies. We saw a lot of mergers largest shipping operators in China and Japan. Also there were consolidations in offshore and shipbuilding companies in recent months, which started on the background of the crisis in the sector and decreasing number of orders.

On the market there is the opinion that with fewer players, the attempts for dumping prices of some companies will cease and price levels will recover. This sends a positive signal to the industry and is expected to become much more profitable and reduce losses. The only real problem is overcapacity, but it is supposed to be solved soon. Only remains to see how disciplined will be transport companies in the future.

Last months were witnessed mergers in some of the largest carriers in the world, including the restructuring in Chinese shipping business, which was ordered by the local government. Also to these mergers and consolidation we should add the growing number of vessel sharing agreements in container shipping business, which aims to improve the efficiency of operations and reduce the costs on East-West Routes.