Cosco Acquires “Perfect Bride” in OOCL, Ocean Carrier Pool Shrinks

Earlier this week, Cosco Shipping Holdings (Cosco) and Shanghai International Port Group (SIPG) jointly announced the acquisition of Hong Kong-based Oriental Overseas International (OOIL/OOCL) for $6.3 billion USD, pending regulatory and shareholder approval.  Drewry, a leading maritime research, and consultation firm, dubbed OOCL “the perfect bride” because of the company’s proven track record of profitability and operational consistency.  Cosco, who beat out CMA CGM interest, intends to maintain the OOCL brand, management, and operational processes since its new bride is already part of the Ocean Alliance – which also includes CMA CGM and Evergreen.  OOCL brings with it a fleet of 66 container ships (44,000 TEU) that, in combination with Cosco, will overtake CMA CGM as the world’s third-largest container carrier.

The acquisition marks the last of its kind and scale with all viable candidates having been purchased in a series consolidations over the past several years.  Further ocean carrier consolidation attempts would face significant regulatory barriers.

Ocean Carrier Mergers & Acquisitions:


  • September 2016 – CMA CGM purchased Neptune Orient Lines (NOL) and APL
  • September 2016 – Hanjin Bankruptcy
  • April 2017 – Maersk Line acquires Hamburg Süd
  • May 2017 – Hapag-Lloyd merged with United Arab Shipping Company
  • July 2017 – Cosco merger with China Shipping Container Lines JM
  • Present – MOL, ‘K’ Line, and NYK merging (but seeing resistance) into One Network Express

Vessel Sharing Alliances:

*Fully operational as of April 2017.  Represent almost 80% of containerized trade and 90% of container capacity.

Ocean Alliance
CMA CGM, Cosco/OOCL, and Evergreen

  • Asia-USWC 13/weekly
  • Asia-USEC 7/weekly
  • Trans-Atlantic 3/weekly

THE Alliance
NYK Group, MOL, ‘K’ Line, Hapag Lloyd, Yang Ming

  • Trans-Pacific 16/weekly
  • Tans-Atlantic 7/weekly

2M Alliance
Maersk and MSC

  • Asia-USWC 5/weekly
  • Asia-N. Europe 6/weekly

vessel-sharing-alliancesThe shrinking world of ocean carrier is a concern for shippers after this string of recent mergers and acquisitions that have left the diversity in the market thin, and competition thinner.  Drewry stated, “it is questionable how independent [different companies] will be from one another. Effectively, shippers will be losing yet another carrier from a pool that increasingly resembles more of a puddle.”  But consolidation, for some, is a step towards stability for an ocean carrier market that has not seen consistent growth or profitability in a long time.  In 2016, the industry witnessed the 7th largest steamship line, Hanjin Shipping, crumble as it declared bankruptcy.  Shippers who took advantage of dirt cheap rates saw cargo stranded as vessels were left idling offshore while ports and service providers ensured they would be paid.  What are shippers to do?  Diversify.

Beneficial cargo owners (BCOs) and shippers have started adding 3PLs and freight forwarders, like Green Worldwide Shipping, to their supply chain mix.  The benefit is not putting your eggs in a financially unstable basket.  Forwarding agents can provide the flexibility to shift bookings when catastrophes strike – and for international shipping, there is no lack of disruptive events.  From labor strikes to good ole’ mother nature, building a sustainable and elastic supply chain will allow a shipper to retain their right to choose in a market where choices keep shrinking.

What do you think about the ocean carrier landscape?

To learn more about  Green Worldwide, visit our website, or connect with us on TwitterFacebook, and LinkedIn.


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