Small carrier consolidation

And so the consolidation wave moves ever forward for the container carriers. This time it is Team Lines in Hamburg who are closing up shop:

As the consolidation among the largest global players have almost reached its natural endpoint, this is not yet the case in the smaller segments.

In the coming years we will continue to see a consolidation trend within the smaller carriers, as the market basically splits into two main components (yes - there are grey areas of overlap, but I hope you see the main drift).

One component is the market for third party feeders. Overall a large third party feeder have some advantages that the major carriers have a challenge in matching. One is the ability to provide feedering purely as a variable cost, an important aspect for a major carrier already challenged by the inflexibility which comes with owning ultra-large vessels. The other is the ability to provide a feeder network which is more granular than the main carriers can often provide themselves. In terms of feedering, network granularity and frequency of services is every bit as important as pure vessel size. This leads towards a consolidation into very few, but very large, feeder companies - especially in Asia and Europe.

The other aspect is that of the small niche carriers. There is still plenty of niches available - also in a digitized future - but necessarily as many as there are small carriers available today. We will see a "shaking out" where the ones who have a clear niche proposition and the ability to execute upon it can be very successful, and other who will disappear altogether - either through absorption by other carrier, or by being closed down (voluntarily or throuhg bankruptcies).

All in all, the net outcome will be an industry with fewer players 5 years from now - and this consolidation wave will in the main be seen amongst the smaller players.

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