My recipe for success: how Gemini can win the alliance race

ID 141849505 © Phil Harland | Dreamstime.com

The Maersk and Hapag-Lloyd sales reps will be out in the field in force over the coming months, visiting their key account customers ahead of the transition to the Gemini Cooperation alliance early next year.

The importance of these face-to-face contacts cannot be over emphasised: shippers remain sceptical about the hub-and-spoke transhipment concept of the new vessel-sharing agreement (VSA) and will want to be reassured that the Gemini partners have all their operational ducks (ships and hub & spoke ports) in a row from day one.

It goes without saying that the carriers’ key account reps will need to bring their a-game into play for these meetings and be confident of their product. It’s an enormous challenge, but also represents a great opportunity and, if handled correctly, could see Gemini set a new, higher bar for schedule integrity and represent a long-overdue game-change for liner shipping.

In my 30-plus years in the liner industry I don’t think I ever heard a shipper say they preferred transhipment to a direct call; so how can the new Gemini partners convince shippers that their transhipment concept will actually work in practice, let alone achieve their ambitious target of 90% schedule reliability?

Moreover, the members of the Ocean and THE (soon to be dubbed Premier) alliances, as well as the outgoing 2M partner, to be standalone carrier, MSC, are understandably selling their ‘direct’ connections to those same customers.

It follows that we are entering a critical period for the Maersk and Hapag commercial teams, as they try to progress early east-west contract negotiations with their customers.

In the main, Gemini intends to deploy large shuttle vessels to and from their nominated hub ports, but to all intents and purposes these are glorified feeder vessels, and for many shippers there’s the rub: feeder services are inherently prone to delays, mostly from events outside the operator’s control.

How do I know this?

As a feeder operator in a past life, I spent many hours pleading with ports to allow my ship onto a berth and be allocated a crane, in order to make export connections and/or load urgently awaited import boxes, despite the fact that often the export connections were for a ship that was currently under load.

Unfortunately, it’s a fact of life that ports prefer to handle bigger ships, which give them less hassle and more revenue per crane hour; furthermore, their largest direct-calling customers always demand and get top priority, be it for berthing or crane allocation.

Indeed, transhipment nightmares for clients are nervously recalled by forwarders and NVOCCs, as a consequence of missed connections, split shipments, boxes stranded on the wrong terminal, or feeders weather-delayed or held off the port as mother vessels are given priority.

So what should Maersk and Hapag’s reps be saying to their customers that could help reassure them?

• In terms of exports, it is vital that both carriers stick to realistic cut-off dates for delivery at the spoke ports – they should not be tempted to allow the commercial heart to rule the prudent operational brain when agreeing to late-running bookings.
• For imports, the carriers must undertake to advise shippers when their containers are discharged at the hub ports, and accurately and honestly confirm when they will be relayed to the spoke port – GPS trackers on containers will boost confidence as they are rolled out, allowing shippers to double-check the status of a box.
• Gemini must operate as a partnership where the vessel operator, be it Maersk or Hapag, provides status updates at the same time – not, as in the current modius operandi of alliance partners, where the operator has a head start on telling its customers what is happening and, as a consequence, the other carriers and their port offices are left to fumble in the dark.
• They must assure all shippers, large and small, that after-sales customer service really does exist for the Gemini carriers – an often overlooked but vital component of liner shipping that can make a real difference.

Schedule reliability combined with better communication could be the recipe for Gemini success

Notwithstanding the huge advances in technology in container liner shipping over the past 10 years, schedule reliability has plunged to all-time lows, with communication from carriers woefully poor. If the Gemini carriers can achieve their ambitious schedule reliability goals and at the same time improve communication, I believe they could be onto a winner.

Also today: The Loadstar’s correspondent in Taiwan, Martina Li, reports that speakers at the recent Busan International Port Conference believe the Gemini hub-and-spoke’ strategy will prove ‘ineffective’