Following the news of AP Moller-Maersk acquiring P&O Nedlloyd, Norwegian tanker shipping group Frontline recently called for more megamergers to help consolidate what it sees as a fragmented market in the ocean-tanker business.

"It is of vital importance for the future of the tanker market that the responsible tanker companies, including their shareholders, are looking for ways to reverse the current trend of a more fragmented industry," Frontline officials said in a news report. "This should over time spur the outbreak of the mega mergers which we recently have seen in the other parts of the shipping market. Economies of scale, flexibility to customers, reduced financing costs, better interest from the capital market and a much improved fleet utilization and efficiency are all factors which strongly direct the industry to further consolidation."

Frontline CEO Oscar Spieler said the tanker market was vulnerable to swings in chartering rates because of its fragmentation. He also said the possibilities for Frontline to grow by buying ships were minimal, due to high prices and that a negative response from General Maritime to Frontline's attempts at a merger have put the deal on the shelf.

dhannon@reedbusiness.com