A take over too far?
News that China’s state-owned COSCO has finally concluded a deal to acquire OOIL, the holding company behind OOCL, will come as no surprise although as late as last week, it was being mooted that it might be CMA CGM which would secure the Hong Kong-based operator. The acquisition sees COSCO move into third place behind Maersk and MSC and ahead of CMA CGM as container ship operators and some are even suggesting that the French operator itself could be next in COSCO’s sights. With each acquisition or merger, the options open to shippers diminishes and this is not seen as a good thing by customers even if surviving shipping lines hold an opposite view. The COSCO/OOIL acquisition follows on from the recent merger of the three Japanese container lines into a single entity trading as ONE. By itself, any consolidating move does not remove capacity from the world fleet except perhaps by way of returning time chartered vessels or putting some owned vessels into lay-up so the effect on bottom lines has to come by way of shedding staff and closing offices where duplications occur. The deal between COSCO and OOCL will apparently see both brands continuing to operate separately and will protect OOCL jobs for at least two years but beyond that who can say what will transpire. With cargo interests already unhappy at the situation that has developed in the container sector, and the potential for hundreds of experienced personnel to be released for their jobs, it cannot now be very long before a new operator will emerge just as has happened in the past. That will be even more likely if CMA CGM do indeed become the target of an unwelcomed bid from COSCO.