Asia shippers benefit from latest alliance changes

By Paul Kelly in News Posted: 7th, March, 2024

New alliance will offer shippers 95% vessel schedule reliability, which will be very appealing to businesses that want to keep inventory levels lean, but competitors may offer alternative solutions that are faster, more resilient and potentially cheaper.

Although there was market speculation that a member of the OCEAN Alliance might be tempted to leave and join THE Alliance, after Hapag Lloyd’s defection to the Gemini Cooperation with Maersk, the four remaining carriers have formally agreed the continuation of their alliance until at least 31st March 2032.

Founded in 2017 under a 10-year deal, the remaining OCEAN Alliance members CMA CGM, Cosco Shipping, Evergreen and OOCL have agreed to continue their vessel-sharing agreement until the end of March 2032.

With the Gemini Cooperation and OCEAN Alliance confirmed, it leaves just MSC and THE Alliance (THEA) members ONE, YangMing and HMM to confirm their intentions.

Everyone’s expectation is that MSC have the scale to largely go it alone and the freedom of not having to compromise with partners should give them flexibility, which could be leverage to create a strategic advantage.

Gemini Cooperation partners Maersk and Hapag-Lloyd plan to deliver massively improved schedule reliability levels of c.90% when they commence operations in February 2025, but they will face challenges in attempting to do so.

With 12 ‘hub-and-spoke’ terminals in Asia, EMEA, North and South America, the Gemini Cooperation will clearly have fewer direct port-port combinations and ensuring the terminals manage high port calls, big exchanges and yard pressure is going to be very challenging and If they don’t get it right, they will be in trouble.

OCEAN Alliance will have the greatest number of east-west trade loops, with 40 across its network, followed by Gemini with 21, THEA with 19 and MSC with 15.

So OCEAN Alliance and/or THEA might leverage their size by refining their network design to fit market niches and could consider competing with Gemini by offering a range of direct port-port calls for shippers that want to avoid transhipments and ensure resilience.

We have price and guaranteed space agreements with individual carriers across all the shipping alliances, so if the potential benefits offered by the Gemini Cooperation or OCEAN Alliance are of interest EMAIL us now and we can outline how they might best support your supply chain.

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