THE advent of megaships results in mergers that leaves more countries served by too few shipping lines to ensure a competitive market, said the UN Conference on Trade and Development (UNCTAD).
The problem could be solved by making many more older ships illegal to force more scrapping, said the Geneva-based UN think-tank, Reuters reported.
"It would be good for the shipping industry and for the environment if we had more stringent environmental regulations that would encourage ship scrapping," said UNCTAD trade facilitation chief Jan Hoffmann, co-author of the report.
Globally, there is now an average of 15.7 companies offering regular container shipping services to each country, a number that has declined steadily from 22.1 in 2004, UNCTAD said in its annual Review of Maritime Transport.
"I don't see any reason why this trend would not continue," said Mr Hoffmann.
The big three - Maersk, Mediterranean Shipping Company and CMA CGM - have 35 per cent of the world market, the report said. At the start of this year, the top 20 firms controlled 83 per cent of container shipping capacity.
"The average vessel size per country will continue to grow and so we expect there will be fewer companies in individual markets, and this is an increasing challenge for the smallest players," Mr Hoffmann said.
When a country has fewer than four suppliers, it risks getting squeezed because there is less pressure on shippers to compete by cutting costs, he said.
There are now 32 such countries, up from 22 in 2004. Most are small island states such as Kiribati, Micronesia and Samoa. But the list also includes Iceland, Qatar, Iraq, Latvia, Eritrea, Montenegro and Cambodia.
"It's more challenging for the smallest players. For the big ones - China and Europe - whether you still have 20 countries competing or 15, it doesn't matter, you still have a choice. But when it goes down from three to two, or from two to one, then you have a critical situation," Mr Hoffmann said.
WORLD SHIPPING
20 October 2015 - 21:30
Megaships, mega mergers make for less competitive shipping, says UN
THE advent of megaships results in mergers that leaves more countries served by too few shipping lines to ensure a competitive market, said the UN Conference on Trade and Development (UNCTAD).
WORLD SHIPPING
20 October 2015 - 21:30
Megaships, mega mergers make for less competitive shipping, says UN
This news 3848 hits received.
These news may also interest you