Sea-Intelligence has examined whether the instability of the past four years has led to the larger carriers gaining control over mid-tiered carriers.
To do this, the firm calculated the global Herfindahl-Hirschmann Index (HHI) and separated the top 30 carriers into three equal groups. The index measures industrial consolidation.
Alan Murphy, CEO of Sea-Intelligence, said: “An HHI below 1,500 is not seen as concentrated and M&A is usually not problematic. An index of 1,500-2,500 is moderately concentrated and in such an environment M&A would be subject to closer scrutiny. An index above 2,500 is highly concentrated.”
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The HHI index for the whole industry – indicated by ‘across all 30’ – has dropped very slightly, and at less than 1,200, it would indicate a low degree of concentration.
Despite the instability since 2020, the concentration, and hence competitive pressure, on the top 10 carriers has remained quite stable, reported Sea-Intelligence.
The same holds true for carriers in the third tier, which ranges from rank 21 to 30. However, the amount of concentration among carriers in the rung directly below the top carriers has increased slightly.
Nevertheless, the increase merely brings the level closer to the internal pressure found among the major carriers, and it remains much below the HHI threshold of 1,500.
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Murphy added: “The data clearly shows that despite complaints from shippers as to the concentrated nature of the industry, the level of concentration, as seen from a global perspective, does not exceed what is normally seen as the threshold for marginal concentration. And the market turmoil since 2020 has neither increased nor decreased these levels.”