Mergers and acquisitions seem to be very much on the mind of Søren Skou, CEO of Maersk Line.
The Wall Street Journal reported that a statement from him detailed how vessel-sharing alliances have been a positive step forward. However, he added, more consolidation within the industry is paramount amid the slump in demand growth.
Skou’s conclusion in his own words was: “We are getting the expected benefits from vessel-sharing agreements, but more can come from consolidation.”
He also noted that this year, demand growth (at around 1.5% to 2%) “is extremely weak (and) much less than anticipated”, while he estimated that capacity will grow around 7%. For next year, he said, Maersk Line expected demand of 3% to 5%.
The result of all this, Skou added, is that smaller carriers are expected to be driven out of the industry (or possibly taken over?), as they won’t be able to compete in terms of cost and frequency of port calls.
