GENEVA, Oct 14 (Reuters) – Shipping mergers are leaving an rising variety of international locations serviced by too few suppliers to make sure a aggressive market, the U.N. commerce and financial thinktank UNCTAD stated on Wednesday.

Globally, there’s now a median of 15.7 firms providing common container transport providers to every nation, a quantity that has declined steadily from 22.1 in 2004, UNCTAD stated in its annual Review of Maritime Transport.

“I don’t see any reason why this trend would not continue,” stated Jan Hoffmann, head of commerce facilitation at UNCTAD and coordinator of the report.

The three greatest companies — Maersk Line A/S, Mediterranean Shipping Company, and CMA CGM S.A. — have 35 % of the world market, the report stated. At the beginning of this yr, the highest 20 companies managed 83 % of container transport capability globally, and all their new orders had been for greater vessels.

“The average vessel size per country will continue to grow and so we expect there will be fewer companies in individual markets, and this is an increasing challenge for the smallest players,” Hoffmann stated.

When a rustic has fewer than 4 suppliers, it dangers getting squeezed as a result of there’s much less stress on shippers to compete by chopping prices, he stated.

There had been now 32 such international locations, up from 22 in 2004. Most are small island states corresponding to Kiribati, Micronesia and Samoa. But the checklist additionally contains Iceland, Qatar, Iraq, Latvia, Eritrea, Montenegro and Cambodia.

“It’s getting more challenging for the smallest players. For the big ones – China, Europe – whether you still have 20 countries competing or 15, it doesn’t matter, you still have a choice. But when it goes down from three to two, or from two to one, then you have a critical situation.”

There was no “government of the seas” with powers to guard small states towards such monopolies, and it was a tough downside to resolve, he stated.

But small island states – lots of that are seen to be in danger from world warming and rising sea ranges – might push for tighter environmental requirements, which might pressure many older ships to be scrapped and assist to curb the fee stress that was contributing to the shrinking variety of transport companies.

“It would be good for the shipping industry and for the environment if we had more stringent environmental regulations that would encourage ship scrapping,” he stated. (Reporting by Tom Miles Editing by Jeremy Gaunt.)

(c) Copyright Thomson Reuters 2015.

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