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Drewry: Alliances a response to a fragile market

The alliances form a response to the continuing crisis in the container industry, says Drewry, outlining the differences between the now four major container alliances. Read on to learn more.

Photo: APM Terminals

With the most recent alliance between CMA CGM, United Arab Shipping Company (UASC) and Chinese CSCL, the final piece of the mega-alliance puzzle seems to have fallen into place. In a new analysis, Drewry looks at the differences between the now four major alliances, which ultimately form a response to the still-fragile environment for container carriers.

"The trend towards these so-called “mega-alliances” is a defensive response to the prolonged down cycle for industry profits, as carriers have realised there is safety in numbers. With little prospect for M&A among the major players, alliances are the half-way house towards consolidation that many in the industry believe is necessary to secure future profitability," says Drewry, noting that the alliances could in fact prevent major mergers or acquisitions, as the market share resulting from acquiring a competitor in a different alliance could veer into the unacceptable.

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