By Mike Wackett
There are “opportunities” for Hapag-Lloyd to gain market share in Latin America as a result of Maersk’s takeover of Hamburg Süd, according to CEO Rolf Habben Jansen.
“It is always a little difficult to retain market share when you go through a merger,” he said following Hapag-Lloyd’s third-quarter investor presentation. It was the voice of experience following the acquisition of CP Ships in 2005, of CSAV in 2014 and the merger with UASC completed in May this year.
Confirming that the Latin America tradelanes were now performing “strongly”, Mr. Habben Jansen said the regulatory concessions necessary for Maersk’s acquisition of Hamburg Süd – including the sale of Brazilian domestic carrier Mercosul Line to rival CMA CGM – “gives us some opportunities to grow a little bit faster” in Latin America.
Maersk’s acquisition of Hamburg Süd was given conditional approval by the Chinese Ministry of Commerce on 7 November. With two additional regulatory approvals obtained shortly thereafter, the purchase was completed at the end of November.
Alphaliner noted that conditions demanded by China meant some quite tough restrictions on growth, including Maersk terminating Hamburg Süd’s participation in the Asia-east coast South America Multicarrier 2 VSA with Hapag-Lloyd, COSCO, HMM, NYK and Zim, which also includes slot swaps with CMA CGM, Evergreen and Yang Ming. Maersk is also required not to extend Hamburg Süd’s participation in the Asia-west coast South America VSA with MSC, CMA CGM, COSCO, Hapag-Lloyd and HMM and cannot enter into any VSA or alliance with CMA CGM, Hapag-Lloyd, MSC and NYK within five years of the acquisition.
But perhaps the toughest of all is that Maersk must reduce its reefer slot capacity share on the Asia-WCSA tradelane from the current combined 45-50 per cent to 34-39 per cent within 90 days of completion and maintain it at that level for three years. Alphaliner said the restrictions “radically altered the service structures” on the Asia-South America trades. It added: “Maersk’s rivals will likely seek to expand their participation in the routes as, after a two year slump, volumes and freight rates have recovered strongly.”
Together, Maersk and Hamburg Sud will make up 19.3 per cent of the world fleet – with 105 Hamburg Süd vessels joining Maersk’s 668 – to provide container capacity of 4.15 million TEUs, not considering the impact of the above restrictions. Maersk said the combined companies would be able to realize operational synergies of $350 to $400 million from 2019.
Reprinted courtesy of The Loadstar (www.theloadstar.co.uk)