Drewry predicts increased M&A activity in container sector
Drewry says that container shipping lines that are financially vulnerable could be forced into mergers and acquisitions due to the extra costs associated with the new low-sulphur fuel law. It queries how that might affect competition on key trades.
Drewry’s new Container Forecaster report states that the container shipping sector achieved a small profit in the region of USD1.5 billion in 2018 and, 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.
IMO regulation may, inadvertently, push further industry consolidation bringing it closer to where it needs to be in order to achieve sustainable profitability.