| GLOBAL TRADE |
THE leading seven container shipping lines will shortly control 90 per cent of the active containership fleet after OOCL merges with Cosco Shipping and the leading three Japanese carriers join together their container divisions under the Ocean Network Express.
As of October 1 2017 there were 379 different vessel operators, but apart from the top 31 carriers none of the remaining container shipping lines command a market share above 0.1 per cent, data from Drewry shows.
‘The industry is heading towards a scenario whereby a small handful of dominant carriers dictate matters, but there is still healthy competition in most trades for now,’ Drewry said in its Container Insight Weekly, reported IHS Media.
Shipping analyst SeaIntel said niche carriers were being hit by the consolidation and capacity injection by the alliances and were fast losing ground. The analyst found that the niche carriers faced greater competitive pressure as they were marginalised.
‘The larger carriers are expanding their fleets rapidly – and with a larger fleet comes the ability to design an ever more granular network. A more granular network will increasingly be a competitive threat to niche carriers from a product design perspective,’ SeaIntel was cited as saying.
The analyst said at the same time, niche carriers were reducing the number of vessels operated as they increase their vessel sizes to achieve advantages of scale. This, however, was weakening their ability to field a detailed granular network, further exposing them to competitive pressure from the larger carriers, SeaIntel pointed out.
Analysts believe carriers putting in extra loaders contributed to the surplus capacity on the route and kept downward pressure on rates.
