bradskelton.com theshippingbloke.com

Thursday, December 14, 2017

Shipping Industry Consolidation rolls on with Maersk Acquiring Hambug Sud

Maersk Transport & Logistics, the world’s biggest shipping container company, have announced the successful acquisition of German rival, Hambug Sud in a $4.02 billion deal.

Combined, the two companies will be able to realize annual operational savings of about $350 million to $400 million, Maersk Line said in a statement fleshing out detail on the deal announced in December.

“By keeping Hamburg Sud as a separate and well-run company, we will limit the transaction and integration risks and costs while still extracting the operational synergies,” said Soren Skou, CEO of both Maersk Line and its parent A.P. Moller-Maersk Group.

This marks an important milestone on Maersk’s journey towards growing a new, stronger business alliance, which continues to offer clients integrated cargo solutions.This acquisition also evidences continued consolidation in the container trade where some carriers cannot continue without sustained profitability. This consolidation is decreasing capacity in some trade lanes including Australia and has made this year peak season the worst in many years.

Ultimately, although final approval from regulatory authorities in countries such as Brazil, China and South Korea, Maersk Line expects the Hamburg Sud transaction to close by the end of the year.

There has been unprecedented consolidation of shipping lines the last two years and others exiting altogether. The losses most have incurred are unsustainable so I am certain that we will see more consolidation into 2018 and rates must rise if shippers are to enjoy stable shipping services meeting there needs.

All for now,