The shipping industry is valued at $500 billion globally, and that figure is only expected to keep growing in the coming years. The growth of the pharmaceuticals industry and the e-commerce industry should keep shippers busy for decades to come. A recent trend indicates that a few super-sized shipping companies could dominate the future.
Who Controls The Shipping Market?
Currently, the top five container lines are responsible for controlling over half of the global market. The breakdown is as follows:
• Mediterranean Shipping, 14.5%
• Cosco OOCL, 11.7%
• CMA CGM, 11.6%
• Hapag-Lloyd, 7.2%
• Other Companies – 38.3%
Recently, Cosco Shipping Holdings, the most significant container line in Asia, said that it would pay up to $6 billion to acquire Orient Overseas International Ltd. Although the two were competitors, Orient owned the world’s largest vessel. Similarly, Denmark’s A.P. Moller-Maersk A/S is also in the middle of purchasing a competitor.
How Will This Change The Industry Moving Forward?
Experts have predicted that the growth of large shipping supply companies will give these companies even greater pricing and bargaining power. These large shipping companies already have a ton of pricing power over large corporations like Wal-Mart.
These larger companies will have the means to invest in another trend revolutionizing the industry, mega-vessels. These ships are more massive than anything ever used in the industry. They provide companies the opportunity to move more cargo with fewer vessels while using less fuel.
Currently, experts estimate that there are less than 60 mega-carriers worldwide. However, that number is expected to double within the next two years. The world’s biggest shipping firms are responsible for 50% of the growth of mega-vessels.
It will be interesting to see if shipping companies are forced to merge in the coming years to give themselves a chance to compete against the major players in the industry.
