By Xu Jianhua

Xu Jianhua

the former director and

professor of the Urban

Modern Logistics Planning

Institute of Shanghai

Maritime University

According to Reuters, CMA-CGM intends to acquire its rival Hapag-Lloyd.

Although the rationality of the potential reasons for the merger of the two companies requires further study, the news has awakened a topic that is ignored for so long,that is, the container shipping industry needs to be further centralized.

At present, the top ten carriers account for 83% of the global container fleet capacity. Maersk Line,Mediterranean Shipping, COSCO Shipping (including OOCL), CMA CGM, Hapag-Lloyd, ONE and Evergreen Marine Corp (including its subsidiaries) account for 76%of the global container fleet capacity.

The market share of the top ten and the top seven increased by 18% and 7% respectively compared with that in March 23, 2015. Moreover the market share of the top three increased from 37.7% to 45%. Therefore,many people intuitively believe that the concentration of the concentration industry has reached the standard of monopoly industries. However, if measured by the HHI index, the industry is still highly competitive.

Reuters reported that three information sources confirmed that CMA has recently made a tentative contact with Hapag-Lloyd to narrow the gap with Maersk, but was rejected by the main shareholders of Hapag-Lloyd. Industry integration should be a good way to get rid of the dilemma, just as the large-scale industry integration before and after the bankruptcy of Hanjin Shipping in 2016. The logic behind this merger and acquisition rumor is not only the strength of the combined company in terms of size, financial resources and market competitiveness, but also the general anxiety of European liner giants on the status of COSCO Shipping after its acquisition of OOCL has got the final approval. It is speculated that CMA’s main intention is to maintain its position as the world’s top three container carriers.

After the acquisition of OOCL by COSCO Shipping, it broke the status of the European giants occupying the top three positions for more than 20 years. It is said that the family-inherited Pacific International Lines in Singapore will be the next acquisition target of COSCO Shipping,but it has not been confirmed by either party.

It is wondered that whether the descendants of Zhang Rongfa, the owner of Taiwan Evergreen Marine Corp will continue with the shipping business or sell the ancestral products just like the descendants of Dong Haoyun, Hong Kong’s first-generation shipping tycoon?Or to merge with YangMing Marine Transport Corp.

In addition to the newly merged ONE in Japan and the HMM that has been supported by the Korean government, the newly emerging Asian stars include Korea's KMTC and SM Line, SITC of China and IRISL of Iran .

Under the leadership of COSCO Shipping, Asian carriers such as those in China mainland, Taiwan, Japan, South Korea are preparing to compete for the leadership position held by the four European giants, and for the power of voice and regulation.

From a long-term perspective, EVERGREEN MARINE COPR., YANGMING MARINE TRANSPORT COPR.and WANHAI LINES LTD.are likely to be bought out by one large stated-owned shipping enterprise.