Four major container carriers went shopping in logistics in 2022. Acquisitions are likely to continue in 2023 in spite of downwards spiraling rates, analyst predicts.
An employee in Hongkong-based LF Logistics, which Maersk acquired in 2022 | Photo: PR foto Maersk
Four carriers — including three leading players globally — dominate the list over the ten largest purchases within logistics in 2022, shows a poll complied by Ti Insigth’s data and research platform, GSCi.
The carriers really have thrown themselves toward logistics, with the container giants MSC, Maersk and CMA CGM behind the four largest trades.
The ten largest buys in logistics in 2022
And together with German freight forwarder Hapag-Lloyd, the four carriers were responsible for six out the this year’s ten biggest logistics acquisitions, according to the record from Transport Intelligence (Ti)
Some of the carriers have logistics strategies implemented, and then they have no choice but to buy
Lars Jensen, CEO, Vespucci Maritime
But even though container carriers’ venture into logistics might seem rushed, it comes as no surprise that they dominate the list of biggest purchases in 2022, says container analyst from Vespucci Maritime Lars Jensen.
According to him, the carriers’ money spending illustrates ”two things at once”.
”Some of the carriers have logistics strategies implemented, and then they have no choice but to buy. At the same time, carriers have seen nice profits,” says Jensen in reference to this year’s large earnings burning holes in the pockets of shipping companies.
Swiss-Italian liner giant MSC tops the list with this year’s single largest transaction — the acquisition of Bolloré Africa Logistics for EUR 5.7bn.
Maersk, the world’s second-largest carriers with the strategic aim of transforming into a logistics operator, was behind the second-largest trade with the take over of Hongkong-based LF Logistics at a price of USD 3.6bn.
However, Maersk also conducted two additional buys within the top 10: Number four and eight on the list, the acquisitions of Pilot Freight Services and Senator International setting the carrier back USD 1.68bn and USD 644m, respectively.
The world’s third-largest container carriers, French CMA CGM, completed this year’s third-largest logistic buy with the take over of Ingram Micros’ Commerce & Lifecycle Services operations at a total of USD 3bn.
The world’s fifth-largest carrier, German Hapag-Lloyd conducted this year’s sixth-largest acquisition with the takeover of SM SAAM S.A for a total of USD 1bn.
Pricy shares in logistics
Following recent years’ congestion in freight and the consequent soaring rates, shares in logistic operators have been expensive which is why Lars Jensen has reason to believe that the carriers’ have been holding back on logistic buys in spite of a cash abundance.
”One might suspect them of holding back within the last 12 months with the market having been so hot,” Jensens says, adding:
One might suspect them of holding back within the last 12 months with the market having been so hot
Lars Jensen, CEO, Vespucci Maritime
”You would have to proceed with extreme caution so as to not pay too much for acquisitions in such a market.”
Jensen outlines that the fire carrier giants all have very different aims for their ventures in logistics.
While Maersk and CMA CGM have strategic ambitions about running a logistics operations, MSC and Hapag-Lloyd investments are of a different nature.
MSC taking over Bolloré Africa Logistics is primarily a result of a desire to achieve access to terminals and ports, and similar ambitions are behind Hapag-Lloyd’s acquistions of SM SAAM, Jensens estimates.
The deal between MSC and Bolloré include all of the Bolloré Group’s shipping, logistics and terminal services in Africa, as well as terminal operations in India, Haiti and Timor-Leste.
The buy of SM SAAM grants Hapag-Lloyd access to ten port terminals in the Americas, which is completely in line with the carrier’s former investments in port terminals.
Aftalen mellem MSC og Bolloré omfatter alle Bolloré Groups shipping-, logistik- og terminaloperationer i Afrika samt som terminaloperationer i Indien, Haiti og Timor-Leste.
Med købet af SM SAAM får Hapag-Lloyd adgang til ti havneterminaler i Nord-, Syd- og Centralamerika, hvilket er i tråd med rederiets tidligere investeringer i havneterminaler.
More buys to come
The question remains, whether carriers will continue land ventures in 2023 in spite of the collapsing freight rates and looming economical recession.
”That will all depend on how deep a recession we are looking into,” says Jensen, who nevertheless expects carriers like Maersk to continue its shopping spree.
”One has to expect Maersk to continue down its strategic path of becoming a logistics operator,” he says, referring to the appointment of Vincent Clerk as future chief exec as a clear sign that Maersk is to hold to the existing strategy.
As opposed to container market influenced heavily by carriers, global logistics is vast and contains a wide array of unknown players. Therefore, carriers with ambitions in logistics have no choice but to buy.
”The challenge is that the world’s logistics market is huge and fragmented forcing big players to buy and assess how to accelerate organic growth”, Jensen says.
