Market outlook in the post-concentrated liner era (supply chain aspect)

Abstract

Consolidation wave among shipping lines has once again emerged as evident from the current round of major consolidations such as Hapag Lloyd and UASC, merger of K-Line, MOL, NYK, and Maersk Line’s acquisition of Hamburg Sud. With little signs of the consolidation wave ceasing, it signals the ideal time to investigate on the liner concentration phenomenon.The report seeks to determine the market outlook of the post-concentrated liner era through an investigation of reasons for consolidation and the resulting impacts. Recommendations in view of the market outlook will also be covered. This report focuses on the supply chain stakeholders interacting with the liner market, targeting mainly at: i) Shippers, ii) Terminal and port operators, and iii) Logistics service providers (LSPs). Information regarding impacts to stakeholders, future perspectives and strategies were collected from six interview participants representing the relevant sectors to be considered in this study. Secondary sources were also used for comparison and supporting purposes.Key findings revealed that liner concentration had led to greater instability of both rates and services that had impacted the supply chain stakeholders, with increasing requirements from the shipping lines, specifically on the liners’ suppliers. Out of the three groups of stakeholders studied, shippers suffer the most direct and generally negative impacts. Strategies like partnerships, enhancement of capacities and capabilities, including the adoption of common data sharing platforms were recommended for the affected stakeholders to cope with the associated impacts. In conclusion, the consolidation force seems to remain unstoppable in the next 5 years, with the liner market becoming increasingly concentrated. While the current situation might not seem favourable for the shipping lines and their stakeholders, improvements in the next 5 years can be expected, with potential alleviation of the current negative impacts and presentation of more benefits for the stakeholders.