Drewry expects more mergers and acquisitions in near future
According to Drewry, financially vulnerable carriers could be pushed into mergers and acquisitions due to the extra costs associated with the new low-sulphur fuel law. If that happens, how might competition on key trades be affected?
Most of the major carriers have now reported FY 2018 financial results and thanks to a Q4/18 rising trend in demand and freight rates, the industry returned a small profit in the region of USD 1.5 billion as reported in Drewry’s new Container Forecaster report.
Welcome as that second-half revival was, attention is now focused on the prospects for this year and what impact the new IMO low sulphur fuel regulation will have on profitability in 2020. It could turn out that the IMO regulation will inadvertently push industry consolidation along, closer to where it needs to be in order to achieve sustainable profitability.