- The European Commission approved Maersk Line's acquisition of Hamburg Sud so long as the latter line retreats from five vessel sharing and slot exchange consortia on European trade lanes.
- Hamburg Sud will withdraw from the five consortia trading from Northern Europe to Central America and the Caribbean, West Coast South America and the Middle East, and from the Mediterranean to both coast sof South America under the normal withdrawal processes. Business will resume as usual in the meantime.
- The European approval is one of many Maersk must secure before acquiring the tenth largest maritime carrier. The U.S., Brazil, Australia, South Korea and China must all approve the deal, too, in a process that may last until the end of 2017, according to various reports.
The various divestments already announced by Maersk in order to secure the deal's approval shed light on the scale of the acquisition, and the degree to which industry consolidation will affect trade lanes and, consequently, shippers.
Late last week Maersk Line announced it would sell its subsidiary Mercosul in order to appease Brazilian regulators, who reportedly worried Maersk's control of Hamburg Sud subsidiary Alianca Navegacao would create anti-competitive conditions. (Maersk would control 80% of trade to Brazil). Various major carriers have already expressed interest in acquiring Mercosul.
Now, the European Commission is requiring Hamburg Sud to withdraw from various trade agreements, which will in the long run affect shipping routes by removing Hamburg Sud's capacity from the equation.
Without withdrawing, the merged entity could "influence key parameters of competition, such as capacity, for a very large proportion of those markets, to the detriment of their commercial customers and, ultimately, of consumers," the European Commission wrote in its decision.
However, the withdrawal does not just affect Hamburg Sud and its South American subsidiaries. IHS Fairplay reports Hapag-Lloyd and CMA CMG are the most affected, as each belong to four or more of the five affected agreements. With significant capacity on North-South trade lanes, it would be unsurprising for a mini-reshuffling to occur among these consortia, too.
Shippers, meanwhile, have seen the effects of industry reshuffling on their service. The most recent major alliance reshuffling sparked a capacity crunch in the Northern Europe - Asia trade lane, which has shippers paying excessive fees and scrambling to get their product loaded. The crisis has been occurring for months, now, according to the European Shippers' Council.
The Hamburg Sud acquisition marks the latest in a wave of industry consolidation. However, it unlikely to be the last as various carriers, most notably CMA CGM, have openly stated they are open to further acquisitions. If Maersk Line succeeds in securing approval from global regulators, it would extend its capacity lead as the top carrier by various percentage points, assuming no further divestments.