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Samskip’s acquisition of Nor Lines to kickstart more feeder line mergers?

Fri 28 Jul 2017 by Rebecca Moore

Samskip’s acquisition of Nor Lines to kickstart more feeder line mergers?
The feeder ship orderbook is buoyant (Credit: BRL Consultants)

The acquisition of Nor Lines from DSD Group by Samskip could herald the start of a series of mergers, especially for companies operating mixed fleets where cash flow is tight, said a senior analyst.

BRL Consultants chief executive Barry Luthwaite added that “there will be more consolidation on a smaller scale as strong feeder owners and operators flex their muscles to acquire ex-KG tonnage and smaller companies find the going tough”.

But the outlook for the container feeder industry is healthy – Mr Luthwaite said the balance between supply and demand has narrowed considerably and is likely to hit a surplus for feeders soon on many routes and continue for the next two years. This bullish consensus is reached by major feeder operators as they build up bigger fleets to cement their strengthening positions.

A buoyant orderbook reveals 243 feeders on order aggregating 517,352 TEU of which only 16 are under 1,000 TEU but 102 are between 1,000 and 1,999 TEU according to BRL Consultants’ figures, “underlining optimism and future vision from owners”.

The feeder growth is driven by European, Asian, Middle Eastern and Mediterranean orders. Mr Luthwaite said the announcement of plans for more self-sufficiency in cabotage by Indonesia and Malaysia will further boost the market.

In six months, the feeder order backlog has reduced from 271 vessels aggregating 554,192 TEU in February to 243 units totalling 517,352 TEU. “With the current controlled orderbook this partly explains the optimism for a balanced trading pattern in the future,” said Mr Luthwaite.

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