Six container carriers create new shipping alliance

Six shipping container carriers have entered into an alliance that will cover all the routes they currently operate. Hanjin, Hapag-Lloyd, “K”Line, Mitsui O.S.K. Lines, Nippon Yusen Kaisha and Yang Ming are currently in the alliance, with one more company negotiating to join soon.

The binding agreement will cover Asia-Europe/ Mediterranean, Asia-North America West Coast, Asia-North America East Coast, Transatlantic and Asia-Middle East/Persian Gulf/Red Sea.

When all the necessary regulatory authorities have approved the alliance, it is expected to begin operations from April 2017. It will carry out operations over five years initially, and will become one of the leading networks in the container carrier shipping industry. In the alliance as stands, there will be 3.5 million TEUs of capacity – an 18% share of the global container fleet capacity. The partners are all operating advanced and competitive fleets, and some 620 ships will be working in the alliance.

In addition the United Arab Shipping Company (UASC) is negotiating to join the new alliance. This will boost the overall capacity by 4 million TEUs. Currently the UASC is negotiating directly with Hapag-Lloyd.

In a statement, member carriers said: “This agreement is a milestone and will enable the six partners of The Alliance to offer sailing frequencies and direct coverage in the market.

“The unique product will feature enhanced port coverage in Asia, North America, Europe including the Mediterranean as well as Middle East.”

The global container industry has many different owner operators, and is a long way from competition being compromised in terms of a few giant players as has happened in the parcel delivery / logistics business. Alliances seem to be the way the industry is heading where individual lines work together effectively as one company. Maersk Line is the biggest player of all and has already entered into a similar alliance on some routes.