UASC-Hapag Merger Hangs on Shareholder Vote

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On June 2, 2016 United Arab Shipping Company (UASC) will hold a general meeting with its four Arab Gulf government shareholders in order to vote on whether to approve or reject decisions to agree on a ‘business cooperation’ agreement, and potentially a merger, with German carrier Hapag-Lloyd, according to JOC.com.

PTI previously reported that the two carriers were in talks to merge resources in a bid to remain competitive in a market that is currently combining resources.

Hapag-Lloyd is also part of a much larger consolidation plan, after recently announcing that it had formed ‘THE Alliance’ with Hanjin Shipping, Mitsui O.S.K. Lines, Nippon Yusen Kaisha and Yang Ming, UASC possibly entering into the alliance at a later date.

If UASC joins the alliance, this would push up the alliance’s total TEU capacity to more than four million TEU.

Nominal East-West ship capacity shares of three mega-alliances, April 2016. (Source: Drewry)

According to a previous statement by member carriers, the alliance will feature enhanced port coverage in Asia, North America, Europe – including the Mediterranean – as well as Middle East.

The alliance will undoubtedly affect ports, particularly with the shift in port rotations, which are due to be announced shortly.

It was recently reported that the advent of new alliances will increase complexity and customer sizes, as well as the shake-up in container ports.

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