[301113.EN.SEA] Biggest Shipping Lines Grow Larger At Expense Of Smaller Carriers

THE third quarter 2013 financial results of ocean liners show that the largest shipping lines are growing faster and gaining greater market share than smaller carriers.

According to London's Drewry Maritime Research, Maersk's third quarter cargo volume growth of 9.5 per cent, compared to the same quarter a year earlier, was more than double the global average of 4.2 per cent.

CMA CGM's cargo volumes recorded the highest growth at 11 per cent. Hapag-Lloyd's cargo volume rose by 8.7 per cent, Cosco's volumes were up 7.8 per cent, while Hanjin Shipping saw growth of 5.8 per cent.

MOL and NYK Line, whose volumes only include the Asia-Europe and Asia-North America tradelanes, registered cargo growth of 2.3 per cent and 1.2 per cent, respectively.

At the other end of the spectrum, "K" Line's cargo volumes declined by 6.3 per cent, APL's volumes were down 5.4 per cent, and OOCL's cargo volume shrunk by 0.9 per cent.

It is difficult to assess how much of this growth is due to service differentiation, such as improved schedule reliability. Price cutting may have played a part on the grounds that carriers gaining market share usually do so by initiating freight rate reductions, but that is not obvious here as everyone suffered similarly.

Maersk's freight rates were down 12.2 per cent, CMA CGM (-11.8 per cent), Hapag-Lloyd (-10.4 per cent), OOCL (-9.4 per cent), MOL (-9.9 per cent), "K" Line (-9.6 per cent) and APL (-8.8 per cent). CSAV suffered the highest freight rate decrease of 13.1 per cent.

Comparisons between 3Q13 and 3Q12 also need to be treated with caution due to the absence of any peak season in the east-west trade lanes in the third quarter of last year.

"The implication is that the big boys were after market share, rather than self-preservation, even though it might have meant further destabilising freight rate market," reports Drewry.

Source : HKSG.