New | Hanjin collapse may spur shipping consolidation: Hapag

The collapse of Hanjin Shipping Co. will probably spark fresh consolidation among container lines as they attempt to ride out the shock waves buffeting the industry, Hapag-Lloyd AG Chief Executive Officer Rolf Habben Jansen said.

“A lot of people hadn’t expected the difficulties for Hanjin in the magnitude we have seen them,” the CEO said in an interview in Hamburg on Tuesday. “It will change behaviour,” with some participants now assessing whether it might not be better to “team up,” he said.

Germany’s No. 1 carrier, which has used mergers to bring down costs and counter the slump that has shaken shipping for the past eight years, doesn’t plan to buy the Asian company or any of its vessels, now stranded at sea and various ports across the globe.

Hapag-Lloyd is busy completing its merger with United Arab Shipping Co., which it aims to do by the end of 2016. “We better make a success of that first,” the CEO said.

Hanjin’s demise has disrupted global supply chains as stores in Europe and the US stock up for the Christmas shopping season. While the gain in freight rates in the wake of the collapse may boost Hapag-Lloyd’s revenue “a bit” in September and October, that alone won’t trigger a sustained recovery in the industry, Habben Jansen said.

Hapag-Lloyd shares have gained 14 per cent since Hanjin filed for court receivership on August 31, though it still trades 7.5 per cent below the November 6 initial public offering price.