♠ Posted by Emmanuel in Trade at 11/21/2016 04:53:00 PM
|It's better to merge than to fade away: the tale of global shipping.|
First up is Korea, where a bankruptcy court has approved of a mid-sized carrier picking up the remaining assets of Hanjin. Especially attractive was the idea that they would lay off fewer workers:
Shipping operator Korea Line Corp. won a contest for some assets of bankrupt Hanjin Shipping Co., whose collapse in late August stranded billions of dollars in cargo at sea, disrupting supply chains world-wide. In a surprise decision, a Seoul court on Monday awarded Korea Line, a midsize bulk-shipping operator, the first right to purchase the assets of Hanjin’s Asia-U.S. route, as well as its stake in a California terminal.Fears of another Hanjin are also playing out in Japan in the form of consolidation among the largest shipping lines. Instead of competing with each other for business tooth and nail and denting profit margins in the process, this merger is intended to decrease intra-national competition to the benefit of the wider Japan, Inc:
A judge at the Seoul Central District Court, which is handling Hanjin’s insolvency proceedings, said it chose Korea Line over Hyundai Merchant Marine Co., which had been expected to win. Hyundai Merchant was backed by senior government officials and its main creditors, which said they would promote the company as the country’s largest oceangoing carrier.
“Korea Line proposed better terms, including higher prices,” the judge said. “It also offered to take over more Hanjin employees.”
Decades of fierce rivalry between the three main Japanese ocean carriers ended with the agreement to merge their container operations that will propel the new entity into the league of the mega-lines.It will be interesting to see how shipping lines will be impacted by non-passage of the TPP enlargement and China's promotion of the rival RCEP. I'll be posting more about that shortly...
In its analysis of the Japanese merger of “K” Line, MOL, and NYK Line, Alphaliner said the “J-3” will become the world’s sixth-largest container line, with the top seven lines controlling around 65 percent of the global liner capacity by 2018. The top seven are expected to widen the gap even further with the rest of the market in the coming years.
The merged pan-Japanese carrier will operate a combined fleet of some 1.37 million twenty-foot-equivalent units with a global market share of about 6.6 percent, based on Alphaliner’s assessment of the capacity operated by the three carriers as at October 31. Their joint orderbook totals 358,000 TEUs.