ICAP’s shipping business is in merger talks with rival shipbroker Howe Robinson, the latest potential tie-up among sector players looking for scale after years of freight market turmoil.

The shipping industry has suffered one of its worst ever downturns in the past five years. Owners ordered large numbers of vessels between 2007 and 2009, just as the global economy started to slow.

Prospects have brightened recently as world trade picks up and the glut of ships is absorbed, but recovery remains fragile. In the meantime, many shipbrokers view larger operations with global teams as the best way to position for a full market revival.

ICAP, the world’s largest interdealer broker, said in a joint announcement with Howe Robinson, one of the world’s oldest shipbrokers founded in 1883, that they had reached an outline agreement to form a new shipbroking firm.

The value of the deal was not disclosed and the new firm, which would merge ICAP Shipping and Howe Robinson, is expected to start trading in the second quarter of 2015.

“We think its profitability would be much greater. Obviously ICAP’s shareholding would be less. But a smaller slice of a bigger pie is absolutely fine by us,” ICAP chief executive Michael Spencer said, after ICAP reported a 9 percent fall in first-half revenue.

Leading global shipbroker Clarkson said it was in acquisition talks with RS Platou, a Norwegian broker and investment bank focused on shipping.

That followed a number of deals in the sector this year. Braemar Shipping Services completed the acquisition of fellow British shipbroker ACM Shipping in July to form Braemar ACM Shipbroking.

In June, U.S. shipping services company McQuilling Partners said it had formed a joint venture with India’s Seaways Shipping and Logistics Ltd to focus on the Indian market. In May, Italian shipbroker Banchero Costa snapped up the dry cargo business of Genoa Sea Brokers.

“Vital parts of the shipping market such as dry bulk carriers and container ships have continued to struggle against massive overbuilding tonnage and slow volume growth,” said Jonathan Moss of law firm DWF.

“In light of these increased challenges, ship brokers have recognized that larger, consolidated entities have a greater global reach and scale and a better ability to attract and retain clients, and to access emerging markets, for example India.” (Reuters)