The steamship industry was riddled with carrier consolidation during 2015 and 2016. A total of eight carriers were either acquired or merged with other carriers. Shippers were hoping that 2017 would bring some stability to their supply chains. The stability lasted only six months. On July 9, 2017, COSCO Shipping Holdings announced that they were making a bid to acquire Orient Overseas International Limited, the parent company of OOCL. 

There were rumors dating back as far as early 2016 that COSCO was in discussions to acquire OOCL. Both companies continuously denied there was any substance to the rumors. The rumors started again in late June 2017 followed by more denials. Major trade publications started reporting in early July 2017 that a deal between the two companies was imminent. By the time the official announcement was made on July 9, 2017, the shock value of another major consolidation had been diminished. The acquisition still faces approval from COSCO stock holders and certain regulatory bodies but it is not expected to face any major objections.

The acquisition will make the new entity the largest carrier serving the Asia to United States trade.  It’s no surprise that COSCO and OOCL believe the acquisition will be a major benefit for shippers. Shippers have heard similar statements from other carriers involved in previous mergers. We think it’s fair to assume that shippers are still waiting to see these service benefits materialize. The only thing shippers have experienced so far is fewer carriers in the market.  Less choices for shippers to move their products is clearly not a benefit.     

The value that IHSA brings to our members is more than simply providing competitive rates. We recognize the importance of keeping our members cargo moving during peak shipping periods. As carrier choices continue to dwindle, IHSA is well positioned to move forward in the evolving carrier landscape.