Strong Q3 just the tonic to revive Hapag-Lloyd after a weak first half
Soaring freight rates and strong third-quarter demand revived Hapag-Lloyd after a relatively difficult first half, ...
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Jilted THE Alliance (THEA) partners ONE, Yang Ming and HMM are ‘keeping schtum’ on their future following the departure of Hapag-Lloyd next year.
Yesterday’s Q3 (October to December) financial results from Japanese carrier ONE were conspicuous by the absence of any mention of THEA – and that lack of reference also extended to the message from its CEO.
No doubt the members of the alliance who will be left are keeping their options open after the shock resignation from THEA of founding carrier Hapag-Lloyd, with its 2m teu of capacity.
ONE, with its current fleet of 1.8m teu and orderbook of some 540,000 teu, is by far the largest of the remaining THEA trio. Next biggest is HMM, with capacity of 783,000 teu and an orderbook of 265,000 teu, followed by Yang Ming, with a fleet of 708,000 teu and an orderbook of 77,000 teu.
It seems unlikely that a weakened THEA could compete with MSC, the Ocean Alliance and the new Gemini Cooperation without recruiting another partner.
Hapag-Lloyd said it had decided to resign from THEA in order to improve its schedule reliability.
“While we have improved in customer satisfaction, we have not made the progress we hoped for on the reliability of our operations,” said the carrier.
In fact, according to container market intelligence firm eeSea’s January Schedule Reliability Scorecard (SRS) analysis of schedule integrity, the THEA grouping “remains a distant fourth” behind the 2M Alliance, non-alliance lines and the Ocean Alliance.
Moreover, according to eeSea data, THEA languished at the foot of the reliability rankings “pre, during and post-pandemic”.
And carrier-by-carrier comparisons are even worse: in top operator reliability rankings, where Maersk is consistently at the top, Hapag-Lloyd slipped to 8th last year from 6th, while its highest-ranked THEA partner Yang Ming was 10th, followed by ONEat 11th and HMM 12th.
Hapag-Lloyd said it needed “a step change in operational performance from our status quo”, which it said was why it agreed to partner with Maersk in the Gemini Cooperation alliance, which has an ambitious target of 90% on-time reliability.
The German carrier said that, in Gemini, it was teaming up with a partner with “a similar business culture”, whereas Maersk described the partnership as “a strong match”, with a “shared ambition and commitment to deliver quality”.
Listen to this clip from The Loadstar Podcast on how the Gemini cooperation could radically transform container shipping.
“A carrier can only control the vessels it operates,” commented Simon Sundboell, CEO and founder of eeSea.
Indeed, “being just a 3PL on somebody else’s ship” was Maersk CEO Vincent Clerc’s initial objection to joining another VSA after its departure from the 2M.
Meanwhile, the THEA members (including, for the moment, Hapag-Lloyd) remain exposed to the negative sentiment of the divorce, prompting them to issue a joint statement reaffirming “unwavering commitment” to the VSA for the duration of this year.
In practice how this will work out remains to be seen, particularly when the new Gemini partners release their preliminary schedules in the third quarter.
Elsewhere, the 2M partners are working through their notice period by dividing the alliance services into MSC or Maersk vessel operated loops.
This would seem an unlikely scenario for THEA, albeit there could be an increase in the number of standalone services by the individual members.
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