With three mergers and acquisitions scheduled to take place in 2016, including CMA CGM’s acquisition of Neptune Orient Lines and China’s ordering of Cosco and China Shipping Container Lines’ merger, beneficial cargo owners are concerned as to how this will affect the supply chain, according to the Journal of Commerce.
Pat Moffett, Vice President of Global Logistics at electronics company VOXX International, said: “Capacity is out of control right now, and we could wind up seeing as few as six to eight carriers. If the carriers handle it right, they will improve their services and balance their rates so that everyone can reach a comfortable level.”
Alison Leavitt, Managing Director of the Wine & Spirits Shippers Association, said: “More services, more differentiation of the market is better than less in terms of the steamship line business. As steamship lines merge or consolidate, it cuts down on the options.
“Our preference is that there are a lot of options in the marketplace and that steamship lines have freight rates that keep them viable. Unfortunately, that’s not necessarily the case right now, so I think the mergers and acquisitions will continue.”
As well as cargo owners, these planned mergers could also affect the alliances that shipping lines are already working with and shake up how these alliances will do business.