With 90% of all consumables depending on sea-born logistics, the shenenigans of the shipping industry should be of interest to any business.
The recent and current news of the creation of potential behemoths in Container Shipping may have Ripples & Tsunami created by external interests.
Placing the Players & Stake-holders on a Board Game of Snakes & Ladders, we let the Observers decide on the eventual winners.
|1:1||Hutchison Port Holdings||82.9 =/= million =/= teu(2014)||China|
|1:2||PSA International||65 =/= million =/= teu(2014)||Singapore|
|1:3||D P World||60 =/= million =/= teu(2014)||UAE|
|1:4||APM Terminals||38.3 =/= million =/= teu(2014)||Denmark|
|1:5||China Merchants Holdings Intl||34.8 =/= million =/= teu(2014)||China|
|2:2||Mediterranean Shg Co||2,245,342||13.3%|
|2:3||CMA CGM Group||1,398,216||8.3%|
|2:5||COSCO Container L.||715,266||4.2%|
|2:12||Hamburg Süd Group||425,917||2.5%|
|2:14||Yang MingMarine Transport Corp.||358,510||2.1%|
|2:18||PIL (Pacific Int. Line)||301,384||1.8%|
|2:21||Wan Hai Lines||154,986||0.9%|
|2:24||X-Press Feeders Group||78,133||0.5%|
|2:28||RCL (Regional Container L.)||52,573||0.3%|
Will the Merger of CMA-CGM with APL-NOL Singapore may drive Mediterranean Shipping Company (MSC) into the arms of a newly formed consortium of Chinese Container Shipping companies, in order to protect Chinese Supply Chain Feight Logistics?
China with a substantial surplus of cash, and as a major lender to USA, to African countries, European Union members, might extend the Global Shipping Logitics further into targeted markets.
3: Raw Material Supply Chain - Production Centers - Destination Priorities
A close analysis of the Chinese interests to control the main Raw Material Resources Supply Chain from Africa, and the drive to maintain balance in Chinese Production chain, emphasises the Chinese interest to seek a control on the Shipping Logisics.
Furthermore, the main markets for the Chinese manufacturing industry lie in USA (Americas) - Europeanean Union, whilst the Rusian market could be easily serviced by the Trans Siberian Railways. New developments in the railways network are currently under discussions between Russia - China - Korea - Japan - India.
As a security measure of any disturbances within the sealanes in Suez - Panama - South Africa, the rail-network may be an alternative, albeit temporarily.
4: China will certainly prevent the European domination of the Shipping & Logistics.
The acquisition of the Singapore Temasek Holdings owned APL-NOL by CMA-CGM, was a carefully planned political construction to dis-allow APM-Maersk to be the Giant-of-the Seas. Strategically, Temasek Holdings is the Singapore government arm of Singapore Inc Limited, highly Dedicated Professional Management team play only with Winners.
Furthermore, whilst Singapore politically favours USAEurope (without Russia), Singapore considers China as part of the Chinese “Family”, and will maintain a “bloodrelationship” with China.
Chinese psyche is totally different to the Western mentality. Whilst the Western strategy is built on Mathematical Lines, the Chinese mind orks like a “Corkskrew”. The oldest technique of pulling a cork from a bottle of wine is best done with a corkscrew.
Similarly, this opens a new dimension into Container Shipping and an Entry into European Union by the Chinese, with a little help from the Singaporeans.
It is most likely that EU may refuse a merger between MSC and another major EU Container Shipping Line. However, this may leave the “gates open” to MSC to seek a partnership with or indeed an outright sale to a Chinese Container Shipping Line.
Currently China is in one of the strongest nations with a strong capital reserve, lightly disturbed manufacturing industry, which the Chinese would like to stabilise. Any further imblance in Logistics activity might create serious political and economic consequences, which the Chinese Government may prefer to avoid.
Hence, it is forecast that the Chinese government may decide to intervene by offering a financial backing to form a Chinese Logistics consortium to strengthen the Chinese led entry into the Top Five Shipping Logistics company with a major acquisition.
In one fell swoop, by taking over a Top Five position in the Seaborn Logistics, China will maintain global pricing, Raw Material logistics, Manufactured & Distribution Logistics, in the Global Domination of Consumerism.
5: Why China Engagement in Spratlys?
Right in the midst of the Asia Pacific sovereign states, China embarked on a take-over of disputed territories to construct on a reclaimed island to build a defensive military structure.
Does this act imply that China may construct two or more similar sea-lane gateways to protect future China territorial ambitions, as well as China Entry Points?
One very clear position of non-inteference, is the Silence of Russian Government on the Spratlys issue, as well as Singapore remaining quiet whilst USA and ASEAN Member states are creating an uproar of continuous protests.
A close, but not quite, parallel is drawn on the annexing Crimea by Russia. One argument or justification of this act by Russia is one of self-defence, to protect the Russian maritime defence by keeping NATO & USA out of one of the strategic Russian ports. Ukraine favouring to join EU and with NATO on the balance, made Russians jump-the-gun.
However, although the Western countries classified this act an an Act of Territorial encroschment, it must be said that, Russia has the largest land mass on this planet. From the borders of Finland-Sweden-Norway passing through China and into the waters of Japan, Russia does not need a land grab. Furthermore, Russia has the largest single sweet water basin in the world, in Lake Baikal.
Similarly, did China decide to build or reclaim a land-base on disputed international waters as a strategic defensive?
6: Winners & Losers
In this game of Snakes & Ladders, plyed by multiple StakeHolders, there are two winners.
The main winner, is of course, China, with a little help from Singapore.
The Runner-up, is the global consumer, who may receive a fairer deal on Shipping Logistics, largely for Chinese gain..
Actually there are no Real Losers in this game. The major players within the Top Five Container Shippers will maintain their positions with Competitive restrictions on heavy margins.
The minor players will survive by “Playing the Harp & Singing for Supper” supplying the feeders to the Top Five.
Process of Natural Elimination, with Survival of the Fittest, and the Law of the Jungle shall prevail.