Halifax a winner as vessels re-route due to US east coast strike
The Canadian east coast gateway of Halifax – and, by extension, port operator PSA which ...
AMZN: EUROPEAN REVERSE LOGISTICS GXO: NEW HIGHSCHRW: CATCHING UPBA: TROUBLE DHL: GREEN GOALVW: NEGATIVE OUTLOOKSTLA: MANAGEMENT SHAKE-UPTSLA: NOT ENOUGHBA: NEW LOW AS TENSION BUILDSGXO: SURGINGR: EASY DOES ITDSV: MOMENTUMGXO: TAKEOVER TALKXOM: DOWNGRADEAMZN: UNHARMED
AMZN: EUROPEAN REVERSE LOGISTICS GXO: NEW HIGHSCHRW: CATCHING UPBA: TROUBLE DHL: GREEN GOALVW: NEGATIVE OUTLOOKSTLA: MANAGEMENT SHAKE-UPTSLA: NOT ENOUGHBA: NEW LOW AS TENSION BUILDSGXO: SURGINGR: EASY DOES ITDSV: MOMENTUMGXO: TAKEOVER TALKXOM: DOWNGRADEAMZN: UNHARMED
Despite Maersk chief executive Vincent’s Clerc’s repeated assertions that Maersk was set to sail an independent course following the termination of its 2M cooperation with MSC, there was always the suspicion that, come January 2025, Maersk would suddenly look like the most attractive partner on liner shipping’s dancefloor.
And so it has proved – although, as eeSea founder Simon Sundboell succinctly put it: “Yeah, that’s a bombshell!”
In a move which has apparently caught its THE Alliance partners by surprise, Hapag-Lloyd, and Maersk, announced the Gemini Cooperation, set to take effect in February 2025 and covering seven major deepsea trades.
On the face of it, Gemini would appear to be a ready-made replacement for the 2M for Maersk, while for Hapag-Lloyd it’s a double win: it gets access to more capacity – Gemini will have 3.4m teu compared with THE Alliance’s existing 3.03m teu – and network planning becomes considerably simpler, as it will be dealing with one partner rather than three – although the vulnerability is that it is very much the junior partner in Gemini, compared with its lead line status in The Alliance.
One of the interesting aspects of the alliance system that sprung up in the aftermath of the global financial crisis was observing how carriers cooperate in practice, which became a particular issue when the pandemic began in earnest and carriers rushed to cut back on capacity.
What became obvious was that the number of carriers in an alliance directly affected its ability to respond to external events – the fewer the carriers, the easier it is to adapt operationally, and vice versa. The paradox, however, is that alliances need scale to be effective – to provide capacity and port pairing coverage that a global network requires – and, outside MSC, that generally means groupings of four to five shipping lines.
So, the ramifications of Gemini are significant, although at this point are generating more questions than answers, as Mr Sundoell notes: “The obvious conclusion is that THE Alliance can’t survive without Hapag-Lloyd, and so ONE, HMM and YML are scrambling right now. There have got to be frantic phone calls between Singapore, Seoul and Taipei as we speak!
“Even CMA and Cosco will be looking over their shoulders in Ocean; do they want to snap up the remaining THEA carriers, and if so what’s ‘the price’?
“Or are we looking at a break-up of Ocean, too (less likely, but possible)? Will we see a two-alliance world, with MSC on the side? Will this spur another round of M&A activity?”
The next steps will likely see the Maersk and Hapag-Lloyd network planning teams begin to sketch out services and scheduling, with details expected to drip out over forthcoming months.
And probably the most avid observers of this process will be ports and terminals, which stand to gain or lose in a big way.
It’s ‘murder on the dancefloor’, as one song currently topping the charts puts it.
Comment on this article
JOSHUA PAUL
January 17, 2024 at 4:10 pmThanks for sharing.
Clearly, this is an interesting development that will make all carriers wear their “dancing shoes”.
Will MSC dance alone in this party of carriers or are we going to ask CMA-CGM for a ballroom dance and become the “ Sagitarius Alliance.”?
Let’s watch this space…