Container shipping corporate concentration becomes far more pronounced

CORPORATE concentration in the container shipping industry has become far more pronounced in the last year as larger carriers assert dominance, leaving smaller players little room to operate, according to industry consultant Alphaliner.

The top 20 carriers had an 84 per cent market share in July, the highest level of liner corporate concentrate ever achieved, as rated by the Herfindahl Index which stated it had reached 6.2 level against a 3.6 rating in 2000.


Although the larger carriers` market share retreated briefly in 2009-2010, the trend has reversed itself over the last 12 months, during which time, the top 20 added 12 per cent of capacity against an industry average of nine per cent.


Despite increased dominance of the larger carriers, the industry remains competitive, said Alphaliner. Recent failures of start-up carriers such as The Containership Company (TCC) and Yanghai Shipping Co (YSC) have highlighted the difficulty of entry for new companies.


In addition, the two Chinese carriers that have embarked on an aggressive expansion programme, but both Hainan Pan Ocean Shipping (POS) and Grand China Shipping (GCS) appear to have been forced to retreat as mounting losses on their new services make it financially painful to continue with growth plans. POS is scaling back its transpacific service offerings this month, while GCS plans to extend the line`s coverage to Australia have been shelved, says Alphaliner.


Outside of the top 20, the most successful in recent years has been the Taiwanese company TS Lines (TSL), which celebrated its tenth anniversary on July 6. It entered the top 100 table as late as 2003 but has since grown to number 22 on the list.