European Inland Shipping Market set for Game-changing Consolidation!

As described in our new report, IMAP Netherlands’ M&A Perspective on the European Inland Shipping Market, we believe that the small independent inland waterway shippers are at a crucial point and now forced to consider an independent future with the European inland shipping market on the verge of a significant consolidation wave.

We see several key factors driving this shift:

• Sustainability, driven by the European Union's ambition to lower emissions means companies require scale and financial strength to keep ahead of the market curve and remain competitive
• Small companies which find it challenging to make the necessary investments in greener technologies will be forced to sell or be acquired by medium and large companies or cease operation altogether
• Geopolitical events and disruptions in traditional transport routes have increased the attractiveness of inland shipping as an alternative

The European Union's focus on green policies is expected to fuel the inland shipping industry, as it is considered one of the most sustainable and effective modes of transport, along with rail transport. This, in turn, is expected to drive merger and acquisition activity due to the growing demand for transport and the need for companies to increase their capacity and leverage economies of scale.

With a focus on sustainability and emission restrictions, the market is witnessing significant growth, particularly in dry bulk cargo transportation, and the European market is outpacing global growth due to sustainability initiatives and expected to grow 5% y-o-y between 2023 and 2028. Dutch inland shipping plays a role in the market being an important hub for international trade and connected to the major waterways of Europe (the Rhine, the North-South Axis, and the Danube) and is particularly strong, accounting for a significant share of the EU's transport performance.

The fleet overview reveals a large fleet of vessels primarily consisting of dry bulk vessels in the Rhine countries, with a trend of shifting towards the Danube countries. The transportation of liquid bulk follows a similar pattern.

Driven by various factors we can conclude that each industry on its own, including Agri-food, Chemicals, Steel, Coal, Aggregates, Container Shipping, and Mineral Oils, is facing growth trajectory and challenges within the inland shipping market.

Influenced by underlying trends such as sustainability initiatives, digitalization, and autonomous shipping, the inland shipping industry will experience significant growth. Governments promote inland shipping as a greener alternative, and the sector is actively adopting digital technologies for optimization. However, extreme weather conditions and a shortage of personnel pose significant challenges.

Overall, the market trends and consolidation will drive merger and acquisition activity even further, with larger inland shipping companies seeking growth and expertise through acquisitions, while smaller independent companies must consider their independent future.

Read our report for expert insights on key market dynamics and trends which will be driving activity in 2024.