By Chris Bryant

(Bloomberg) — Airlines way back cottoned on to the truth that being a part of an alliance may save them cash and assist them provide passengers a larger number of routes. Container-shipping corporations have taken slightly longer to determine this out — however at the moment are copying the technique wholeheartedly.

Number of corporations in Hapag Lloyd alliance: 6.

Until lately, there have been 4 main container-liner alliances — however that trade construction is now quickly shifting as dwindling freight charges — the results of the trade ordering too many ships — savage earnings.

The newest love-in got here on Friday when Germany’s Hapag-Lloyd stated it could type an alliance with 5 Asian carriers. AP Moeller Maersk and Mediterranean Shipping, the world’s largest container delivery corporations by capability, are already bosom buddies — their alliance is known as the 2M partnership. The subsequent two largest liners, CMA CGM and Cosco are amongst a bunch that final month shaped the Ocean Alliance.

Like the airways’ code-sharing agreements, these vessel-sharing partnerships assist to chop prices and higher use spare capability. They permit corporations to supply extra frequent providers — with out shopping for extra ships or including new routes. They can as a substitute can share area on different alliance members’ vessels.

But you solely want to have a look at the profitability of Europe’s legacy airline carriers to know that becoming a member of an alliance solely will get you a part of the way in which.

U.S. airways are much more worthwhile than their European friends. The purpose? There are fewer of them. Following a wave of consolidation and bankruptcies, simply 4 airways management greater than 80 p.c of U.S. industrial airline site visitors. In distinction, Europe’s airline trade is much extra fragmented: Lufthansa, Air France-KLM, IAG, Ryanair and easyJet collectively have lower than 50 p.c of the market.

Container delivery corporations are a proud bunch — nationwide or household pursuits tended to preclude takeovers up to now.

But that’s began to alter. Cosco and CSCL have joined forces, Hamburg-Sued purchased CCNI’s container line actions final yr, CMA-CGM is shopping for Singapore’s Neptune Orient Lines and Hapag-Lloyd is speaking to United Arab Shipping a few merger.

A once-fragmented trade is changing into dominated by giant gamers, with the highest 10 already controlling virtually two-thirds of capability, in comparison with simply over a 3rd 15 years in the past.

Fitch Ratings thinks extra M&A is “inevitable” as looser alliances can’t totally exploit alternatives to spice up capability utilization and minimize prices.

Consolidation bodes effectively for an eventual restoration in trade profitability as a result of smaller gamers could battle to compete and bankruptcies would take capability out of the market. But much less competitors in delivery isn’t excellent news for exporters who at present profit from low freight charges. Smaller international locations could come to rue the wave of consolidation as a result of they could be left with much less alternative about who transports their items.

Again, the expertise of U.S. airways is instructive. Passengers there now have fewer airways to select from at their native airport, and fares have risen. So whereas it’s tempting to pity the container delivery trade’s present plight, that sympathy could not final without end. Competition regulators ought to be on alert.

This column doesn’t essentially replicate the opinion of Bloomberg LP and its homeowners.

© 2016 Bloomberg L.P