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“ At the time, these charters were seen as kind of expensive, but in the last five years, shipbuilding prices have exploded,” he explained, noting that the price of a newbuild 24,000-TEU LNG-powered ship rose from around $ 165 million in 2020 to $ 265 million in 2022.“ If the alternative is ordering new ships now, the Zim charters are a bargain from today’ s perspective.”
Rahul Kapoor, global head of shipping research and analytics at S & P Global Energy, said this focus on physical assets extends well beyond the boundaries of container shipping and even the broader supply chain umbrella. On Wall Street, for example, investment is shifting away from technology companies and back toward“ HALO”( heavy assets, low obsolescence) stocks, i. e., companies with physical assets that hold their value over time.
“ The market is gearing towards assets, whether it’ s ships, materials, metals,” Kapoor said during TPM26.“ It makes sense to have those assets... And what we’ ve seen over the last 15 to 20 years is a pivot, a slight pivot, towards what is required in terms of increasing resilience.”
In addition to assets, Hapag-Lloyd stands to gain considerable volumes in the trans-Pacific, trans-Atlantic, Asia – Latin America, and intra-Europe trades. It will also gain access to a much larger intra-Asia service network and a niche car carrying business operated by Zim subsidiary Gold Star Line.
Still, the transaction must be approved by the relevant regulatory authorities, including competition authorities in the US, EU, and China, and most notably the government of Israel, the latter of which is by no means a fait accompli. Although the initial merger proposal includes a novel way of keeping Israel happy, questions remain about
The case for consolidation
By Robbert van Trooijen
Debate over consolidation in the container shipping industry has persisted for decades. Advocates argue that the sector has long been fragmented, and that further consolidation is essential to improve financial resilience, operational efficiency, and long-term sustainability.
Critics counter that consolidation concentrates pricing power in the hands of a few large players, potentially leading to higher freight rates and reduced competition.
In my experience, the industry’ s structural cyclicality has changed little over time. Freight rate movements in recent months suggest that competitive pressure remains intense, both within alliances and between independent carriers. Indeed, competition is likely to increase over the next three to five years as new vessel capacity enters the market. However, the competitive landscape itself has shifted dramatically.
The global container ship order book currently stands at more than 35 % of the existing fleet— an unprecedented level. At the same time, the four largest carriers— Mediterranean Shipping Co., CMA CGM, Maersk and Cosco— have taken decisive steps to widen the gap between themselves and the rest of the industry. Meanwhile, Hapag-Lloyd has strengthened its position as a clear number five, extending its lead over mid-tier competitors such as Ocean Network Express, Evergreen, HMM and PIL.( Industry data sources include Drewry and Clarksons Research.)
Systemic shocks underscore the broader economic value of financially stronger carriers.
Shipping is a low-margin, capital-intensive business where scale matters enormously. Larger fleets enable lower unit costs, stronger purchasing power, and more efficient network deployment, yet there are limits to what alliances alone can deliver. Alliances primarily provide network coordination and slot sharing; they do not generate the full cost synergies available through unified ownership structures.
True economies of scale typically come from either expanding fleets organically or pursuing mergers and acquisitions. Of the two, M & A offers the additional advantage of organizational synergies— streamlined management, consolidated procurement, integrated IT platforms, and rationalized overhead— that alliances cannot replicate.
A‘ window of opportunity’
This raises an important question: Why is consolidation particularly relevant now?
In cyclical industries such as container shipping, mergers rarely occur during market peaks. When profits are strong, shareholder expectations rise, valuations expand and forward multiples make transactions difficult to justify. Conversely, consolidation tends to occur during downturns or when markets are transitioning toward weaker conditions.
That transition phase appears to be underway today. Many carriers still retain significant liquidity accumulated during the extraordinary profitability of the COVID-19 era boom. These financial reserves provide a unique window of opportunity. Companies can invest in strategic partnerships or acquisitions while still maintaining operational stability and customer confidence.
They also have the resources needed to execute careful integrations that are critical to preserving service quality and avoiding customer disruption. If carriers wait several years, those reserves may be eroded by weaker freight markets, rising costs, or capital expenditures tied to fleet renewal and decarbonization requirements.
The mid-tier segment of the industry presents multiple potential candidates for a merger.
12 Journal of Commerce | April 6, 2026 www. joc. com