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Your brief for the week ahead
w/c Mon 9th July 2018

1. Bigger better faster stronger. Consolidation is still top of the agenda.

Reports of a tie-up between box giant’s CMA CGM and Hapag-Lloyd may turn out to just be a story for the summer slowdown, but there is a strong logic behind it that has more to do with preserving positions than gaining market share. This is not just a question of financial size and strength, it is about fighting off the threat, both real and perceived, from the ever-expanding Cosco, which only this week had its final approval granted for its acquisition of Orient Overseas Container Lines. 

While the big box moves may the obvious headliners when it comes to consolidation, M&A activity is still happening quite consistently across most sectors right now. Last week Norwegian maritime technology business Kongsberg snapped up Rolls-Royce’s Marine division in a marriage of convenience (Rolls Royce was struggling to re-focus on core businesses and Kongsberg have the right set up to innovate and make use of their rival’s heft and seem to think they can make a profit where Rolls Royce failed). 

Meanwhile, this week BW LPG has ramped up its approach for Dorian LPG (after its previous offer was unanimously rejected), while parent company BW Group has entered into a definitive agreement to purchase an extra 36% stake in Hafnia Tankers (they now own 44% of the Danish shipping company). Size isn’t everything, but it’s certainly helps in this market – expect more scale at the top and more niche, but focussed plays at the bottom. Be nice to those in the middle – they probably won’t be around much longer.  

Read more on Lloyd’s List.
Conquering Cosco through
Hapag-Lloyd denies CMA CGM ‘made merger approach’
US clears Cosco acquisition of OOIL
BW LPG raises offer Dorian LPG
BW Group raises stake in Hafnia Tankers to 43.5%

 

2. Sanctions risk hasn’t gone away, it just dropped down the news agenda briefly.

French container line CMA CGM has ceased trading in Iran rather than risk breaking US sanctions. They are not the first and they won’t be the last, but interestingly some of their Asia rivals are hanging on in there. Chinese companies’ attitudes towards compliance of the US sanctions against Iran could well decide whether Iran can maintain its trade (in box and tanker, or others for that matter) to some extent. 

Chinese companies would not want to lose access to US markets and financing by any means, but given the current US-China trade war the risk calculations may be shifting somewhat.  It’s pure speculation on our part, but you could make the argument that the outcome to the China-US trade war may ultimately determine how effective Washington’s sanctions against Iran will be. 

Meanwhile, reports that Washington is seeking a total shut down of Iranian oil exports are not translating into reality (latest exports figures via LLI’s APEX service are unabated from Iran at 2.5m bpd), but we will keep an eye on whether that changes. Any shift in trade patterns will have a knock-on implication in terms of tonne-miles for tanker and therefore see a swing in opportunity and risk for clients. 

Our current advice to anyone looking for insight – read the Lloyd’s List Quarterly Outlook.

Not a Lloyd’s List subscriber? Well you might want to take a look at THIS.

 

3. Why it matters that 2019 is the year of Empowering Women in the Maritime Industry.

Each year the International Maritime Organization designates a theme for the year. While this year is all about their 70th anniversary, 2019 is set to focus on Empowering Women in the Maritime Industry. With only 2%-3% female seafarers globally in 2018, that is more than necessary. 

It’s not the first attempt at tackling the issue (IMO launched a gender and capacity building programme in 2005), but this latest push comes amid significant changes across the industry and a groundswell of activity from both politicians and industry stakeholders. 

Just last week IMO Council officially brought The Women in Transportation and Maritime Industries Association into the International debate, important, but it will be changes inside companies that ultimately decide the success of such programmes. Important to note then that forty large maritime companies have signed a gender equality pledge to address the paucity of women in the UK industry.

 The companies include cruise operator Carnival UK, part of the world’s largest leisure travel business, which has a market capitalisation of $40.5bn; Dubai-based global port operator DP World; and BP Shipping. An IMO-led spotlight is useful, but this is a live issue for all shipping companies. 

We asked our 50.7K Twitter followers @Lloyd'sList what they think and here is the result.


Read more here on Lloyd’s List. IMO focuses on women for World Maritime Day theme

 

4. “We’re not very good at what we do and don’t like talking about our business”

If you work for a company that is generally shy about talking up its successes and you are quite content to see your excellence go unsung, then ignore this part and go do something else. 

If, however, you consider yourself to be the best at what you do and are constantly striving to grow your business, market recognition or generally enjoy showing off about your latest success story, then you have a duty to click here and enter one, or all, of the Lloyd’s List Awards.

Entry is free, your submission will be judged by an independent panel of experts and should you win it will give you marketing that money literally cannot buy. 

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