Consolidation will bring stability to liner shipping industry, says Maersk China boss

The liner shipping industry will see more consolidation, mergers and bankruptcies, which will in turn bring more stability to the market, according to Tim Smith, chairman of Maersk China.

“Next year you will have a situation where the top seven carriers will control around 65 per cent of the capacity,” Smith said. “I think it is a good step and a good trend for the industry overall as the liner shipping market was highly fragmented for many years.”

Speaking at the Asian Logistics and Maritime Conference in Hong Kong, Smith said the recent unprecedented wave of consolidation may provide a platform for a more stable future.

The bankruptcy of South Korea’s Hanjin stranded billions of dollars in cargo at sea, disrupting supply chains worldwide. On Tuesday, the shipping company said it decided to sell part of its container ship business to Korea Line for 37 billion Korean won (US$31.38 million).

“If there are good assets available to acquire in Hanjin and it can help the consolidation precess, we will look at it,” added Smith, who said he will not buy new ships because of the overcapacity.

Consolidation is a cause for optimism in the liner shipping industry, but it is a sector that may be threatened by a wave of protectionism unleashed by the next US president Donald Trump.