Hapag-Lloyd, CSAV holding merger talks

   Hapag-Lloyd and CSAV said they “are currently maintaining discussions if a possible business combination or any other form of association would be of mutual interest.”
   The German and Chilean container shipping companies said “to date, these discussions have not resulted in any binding or non-binding agreement between the parties.”
   They added in identical press releases sent out early Thursday morning in Germany/late Wednesday in Chile that “should any relevant development occur, more information will be published.”
   The two companies publicly disclosed their the merger talks after a report appeared in the Wednesday edition of the German newspaper Die Welt and caused a spike in the shares of CSAV. Bloomberg said at one point Wednesday the shares rose as much as 27 percent.
   Earlier this year, Hapag-Lloyd and fellow German carrier Hamburg Süd ended merger talks that had been under way since December 2012.   
   Like CSAV, Hamburg Süd is a powerhouse in the trade to Latin America. According to Alphaliner, Hapag-Lloyd is the sixth largest container carrier in the world whose fleet 152 ship fleet has a capacity of 730,016 TEUs. Hamburg Süd is the 13th largest, with 103 owned and leased ships with 450,155 TEUs capacity.
   BlueWater Reporting estimates that between the two of them, CSAV and Hapag-Lloyd have:

• 26.9-percent share of the capacity between North America and South America and have space on 76 percent of the services that connect the two continents. 
• 12.1 percent of the capacity between Europe and South America and have space on 55 percent of the services that connect the two continents. 
• 7.9 percent of the capacity between Asia and South America and have space on 74 percent of the services that connect the two continents

   In a recent BlueWater Reporting study entitled “ Analysis of P3 ramifications – logically extending to P8 globally?”” about the proposed vessel sharing alliance of Maersk, MSC and CMA CGM, author Francis Phillips noted that out of 213 P3 services worldwide, 12 had CSAV as an individual partner, 10 others had Hapag-Lloyd and Hamburg Sud together as partners, five had Hapag-Lloyd alone, four had Hamburg Sud alone, three had Hapag Lloyd with CSAV, three had Hapag-Lloyd, Hamburg Sud and CSAV as partners, and one had Hamburg Sud with CSAV. All 38 of these services used the same hubs and spokes as the P3 carriers at present and in their new services seeking regulatory approval.
   Phillips wrote, “In addition to the 69 existing P3 member services with east-west component legs, there were 144 running exclusively north-south. Yet in each case, at least one major east-west hub was included in the service rotation. This is the essence of ‘hub and spoke’. By making all their services pass through a central ‘hub’ or multiple hubs in each key region, dividing each service into separate ‘spokes’ on either side of a hub, Maersk, MSC and CMA CGM are able to solve the age-old liner problem of keeping ships full and balanced with paying cargo in both directions along each spoke. The origins of cargo in a ship leaving a hub (from spokes feeding into the hub from all sides) may be completely different to the spoke combination for return cargo on the same ship going in the other direction.”
Phillips wrote that it was “noteworthy that the north-south services of Hapag-Lloyd, Hamburg Süd, CSAV and Marfret all seemed to be partnering with members of the P3 or else partnering with each other, and using the same hubs as the P3. A re-run of the P3 exercise taking Hapag-Lloyd as a fourth member accounted for all the services of Hamburg Süd, CSAV, CCNI, and Marfret, suggesting that in the longer term, as tonnage is cascaded, the P3 Network may logically extend to become the P8 Network.”
  
Nominal TEU capacity for all carriers on services on which either Hapag-Lloyd or CSAV participate as of December 1, 2013: