Wednesday, 21 October 2020
The Tip of the Freight Consolidation Iceberg
Austmine Limited
/ Categories: Articles & Editorials

The Tip of the Freight Consolidation Iceberg

Written by Laurie Pevitt, CargoHound Advisory Board Member

THE IMMINENT, and now confirmed withdrawal of NYK Line from the Australian container trade – first raised as a possibility by CargoHound in early October – appears to be the tip of the iceberg in terms of consolidation of Australian and global container freight services.

As further rationalisation flows through the industry, the potential impacts for Australian shippers is huge - with a shrinking of the competitive base and probable tonnage reductions.   It will also mean more consolidation (read job losses) in Australia and elsewhere.

NYK was the first mini shock for Australian shippers, and was followed globally by news of Maersk Line cancelling purchase/build orders for their mega ships. 

Both of these moves are clearly flow on impacts from the combination of over supply of container capacity, falling volumes – and subsequently falling freight rates, and indicate that the current state of play is not sustainable.

The rationalisation looks unlikely to stop there.

In the last week, Neptune Orient Line have advised they are in talks with Maersk as well as CMA-CGM over a possible acquisition of the $USD 1.9 billion Singapore based shipping line.

NOL is 65 % owned by Singapore's Temasek Holdings - the City-states sovereign wealth fund.  NOL operates under the brand "APL" in the Australian trade and was founded in 1968 as Singapore national line.

Meanwhile, there is continued talk of an upcoming merger between the Chinese state owned shipping companies COSCO and CSCL – currently the sixth and seventh largest container freight carriers in the world. 

If the deal receives regulatory approval it would make the combined company the fourth largest carrier in the world with a combined fleet of over 360 vessels.

At the same time, there are media reports that the South Korean government is encouraging container lines Hyundai Merchant Marine and Hanjin to amalgamate – a move that has so far been resisted by both parties.

Tighten your belts.

Previous Article IMARC 2015: Warrick Ranson from Rio Tinto: Speech and Presentation
Next Article Two Engineers from Gekko Systems Take Out Mining Award

Austmine Programs

All Programs

Austmine Publications

All Publications


SUBSCRIBE to our newsletter





WonderWebs.comTerms|Privacy|Copyright © 2020 Austmine | Mining Equipment, Technology and Services (METS) Sector
Back To Top