LOGISTICS
Weakening economy causes mergers in logistics sector to slump / Maersk relies on large number of methanol carriers / Freight rates stagnate
 Smoke and soot: Time for ships to become climate-friendly (Photo: Pexels, Chris Leboutillier) |
Thanks to the Daimler-Chrysler merger debacle in 1998, we have learnt that most mergers are like marriages – lasting success is not guaranteed. In 2022, many such marriages took place on the logistics market. But since appearances are deceptive, the number of mergers & acquisitions in 2022 actually fell compared to 2021.
According to consulting firm PwC, there were 261 company acquisitions worldwide in the transport and logistics industry in 2022, each with a purchase price of at least USD 50 mn. This corresponds to 20% fewer transactions than in the year prior. The total deal volume also decreased significantly, by 15%. However, since the total still came to a hefty USD 181 bn, we do not want to sound the death knell just yet.
The reason for the declining number of mergers is the increasingly difficult refinancing of such purchases – among other things, banks are not as flush with cash as they used to be, and rising interest rates are doing the rest. In addition, the gloomy economic outlook is leading to falling company prices, so most sellers do not want to gold-plate their silverware yet.
According to consulting firm PwC, there were 261 company acquisitions worldwide in the transport and logistics industry in 2022, each with a purchase price of at least USD 50 mn. This corresponds to 20% fewer transactions than in the year prior. The total deal volume also decreased significantly, by 15%. However, since the total still came to a hefty USD 181 bn, we do not want to sound the death knell just yet.
The reason for the declining number of mergers is the increasingly difficult refinancing of such purchases – among other things, banks are not as flush with cash as they used to be, and rising interest rates are doing the rest. In addition, the gloomy economic outlook is leading to falling company prices, so most sellers do not want to gold-plate their silverware yet.
Heavy investments in infrastructure projects
Meanwhile, shipping company MSC has had a few inhibitions about putting money on the table. The Italian-Swiss company announced that it would invest EUR 700 mn in Port 2000 in Le Havre, France. The money is to be used to massively expand the infrastructure there and triple container throughput to 4.5 mn TEU per year.
The investment follows a logic: only a few weeks ago, at the beginning of 2023, MSC subsidiary Medlog bought a terminal in the Seine port in Bruyeres-sur-Oise (north of Paris). A large part of the container traffic to and from the French capital runs via this inland port. By increasing the use of inland vessels, Medlog wants to save about one million truck journeys within 10 years. At present, diesel trucks make up the lion’s share of steel box transports, accounting for 88% of hinterland traffic.
In order not to fail in its self-imposed goal of being climate-neutral by 2040, MSC’s major competitor Maersk is also investing in infrastructure projects. The world’s largest shipping company signed an agreement with the Spanish government for the mass production of green methanol as an environmentally friendly fuel for cargo ships.
EUR 10 bn is to be invested in this project. The production sites are Galicia in the north and Andalusia in the south of the Iberian Peninsula. In recent years, Maersk has also ordered the construction of 19 ships. These methanol carriers are to replace sooty, heavy oil barges and help save about 2.3 mn t of CO2 annually.
The investment follows a logic: only a few weeks ago, at the beginning of 2023, MSC subsidiary Medlog bought a terminal in the Seine port in Bruyeres-sur-Oise (north of Paris). A large part of the container traffic to and from the French capital runs via this inland port. By increasing the use of inland vessels, Medlog wants to save about one million truck journeys within 10 years. At present, diesel trucks make up the lion’s share of steel box transports, accounting for 88% of hinterland traffic.
In order not to fail in its self-imposed goal of being climate-neutral by 2040, MSC’s major competitor Maersk is also investing in infrastructure projects. The world’s largest shipping company signed an agreement with the Spanish government for the mass production of green methanol as an environmentally friendly fuel for cargo ships.
EUR 10 bn is to be invested in this project. The production sites are Galicia in the north and Andalusia in the south of the Iberian Peninsula. In recent years, Maersk has also ordered the construction of 19 ships. These methanol carriers are to replace sooty, heavy oil barges and help save about 2.3 mn t of CO2 annually.
Freight rates (in the week from 23 - 29 January; price for a 40-foot container)
China - US West Coast: unchanged at USD 1,700 (EUR 1,574)
China - US East Coast: +5.9% on the previous week at USD 3,400
China - Northern Europe: unchanged at USD 3,000
Northern Europe - China: +6.7% on the previous week to USD 800
China - Southern Europe: -14.3% on the previous week to USD 3,500
Southern Europe - China: unchanged at USD 900
US East Coast - Northern Europe: +5% on the previous week to USD 1,000
Northern Europe - US East Coast: -1.5% on the previous week to USD 6,500
China - US East Coast: +5.9% on the previous week at USD 3,400
China - Northern Europe: unchanged at USD 3,000
Northern Europe - China: +6.7% on the previous week to USD 800
China - Southern Europe: -14.3% on the previous week to USD 3,500
Southern Europe - China: unchanged at USD 900
US East Coast - Northern Europe: +5% on the previous week to USD 1,000
Northern Europe - US East Coast: -1.5% on the previous week to USD 6,500
27.01.2023 Plasteurope.com [251968-0]
Published on 27.01.2023
German version of this article...