Consolidation seen in face of overcapacity

OVERCAPACITY continues to plague the shipping sector, container shipping in particular, prompting industry leaders here to call for greater consolidation and collaboration among companies to help them cope with this trend.

Along with other issues such as talent shortage and environmental sustainability, industry leaders at a conference in Singapore said yesterday that consolidation and stronger alliances across public and private sector would help the industry overcome these challenges.

According to Lloyd's List, the world's container fleet stood at 5,043 vessels at the end of 2013, up from 5,010 at end-2012, with the problem of excess capacity amplified by the introduction of larger vessels. Such oversupply affects the profitability of the industry, forcing many liners to consider consolidation and collaboration as solutions.