Overcapacity, lower economic growth and weak commodity prices will create a challenging environment for Asian shipping companies in the medium term. This is coming at a time when narrow margins and high leverage make many of the largest firms in the region vulnerable, says Fitch Ratings.
Smaller shipping companies are likely to be among the most at risk, and consolidation is highly likely among the larger Asian firms. Further M&A proposals should be expected beyond the already-mooted merger between China Shipping and China Ocean Shipping Company (COSCO) and the ongoing discussions between France's CMA CGM and Singapore's Neptune Orient.
Fitch assessed the outlook for Asian shipping companies in its latest report "Macro Weakness and Overcapacity Buffet Asian Shipping", published on 30 November.
