Supply Chain Matters provides an update to the early December news concerning merger talks between two high profile ocean container shipping lines, German based Hapag-Lloyd and Chile based CSAV.
Today, The Wall Street Journal reported that that a merger agreement among these two lines is expected to be signed by early next month. This merger would create the fourth largest container shipping line and as we have indicated in earlier commentaries, would more than likely precipitate other industry moves.
The WSJ quotes an informed source as indicating that a Memorandum of Understanding is likely to be signed in the next three weeks. Also reported is that the two sides are still negotiating as to how much each line will hold in the merged entity and whether CSAV’s ships will be leased to Hapag-Lloyd. The latter would control 70 percent of the merged entity. Two other previous attempts by Hapag to merge with separate lines met with no success.
The WSJ further acknowledges that this merger is a likely response to the announced P3 Network expected to begin sometime this year, an alliance involving top three industry players Maersk, MSC and CMA-CGM. If approved, the P3 Network will control approximately half of globe’s busiest trade routes. This ongoing development is part of Prediction 8 of our 2014 Predictions for Global Chains, a re-structuring of global transportation surface networks,