News / Zim and THE Alliance to offer joint Mediterranean-US east coast services next year

THE Alliance and Israeli carrier Zim are to combine Mediterranean-US east coast services next April.

Subject to regulatory approval, the co-operation involves THE Alliance dropping calls at Barcelona, Tarragona, Valencia and the transhipment hub of Algeciras from its AL6 service, which will be served by Zim’s flagship ZCA service, branded AL7 by THE Alliance.

In turn, Zim will co-load on THE Alliance’s rejigged AL6 service, marketing it as its ZC1, which will include a call at Savannah.

However, THE Alliance’s AL7 won’t include other ZCA ports Ashdod, Haifa, Izmir and Piraeus, currently within Zim’s network.

Interestingly, while THE Alliance announcement acknowledges the co-operation with Zim, the Israeli carrier’s own release makes no mention. Zim’s vice-president, cross-Suez and Atlantic business unit, Rani Ben Yehuda, said: “We are very pleased to launch our upgraded Atlantic services, an improved product with wider port coverage and better service levels to customers.”

Zim posted a net loss of $37.6m in the third quarter of the year, following a loss of $74.2m in Q2. In September, it agreed with its creditors to defer $115m of loan repayments until 2018 – 2020.

Zim’s future has been the subject of much speculation in recent months; the carrier was rumoured to have been tapping interest from rivals on the sale of its global network and reverting to a niche Mediterranean trade operation.

Indeed, one Wall Street Journal source was quoted: “Zim is on the market…their bankers are travelling around the world with a sale prospectus.”

However, this was strongly denied by a spokesman who said Zim had “been a global player for the past few decades” and had “no intentions whatsoever to stop”.

Regarding the third-quarter results last week, Zim president and chief executive Rafi Danieli said: “Our strategy, operating as a global niche carrier focusing on select markets, along with intensive investment in customer service, will improve Zim’s position to endure the crisis and plan ahead for future growth.”

The agreement with THE Alliance brings Zim in from the cold, in terms of the new alliances, and it gives partners Hapag-Lloyd, MOL, K Line, NYK and Yang Ming an advantage over rival groupings 2M and Ocean, which will only be offering one Mediterranean-US east coast loop in their networks.

THE Alliance filed its proposed agreement with the US Federal Maritime Commission (FMC) on 10 November and will be required to submit an amendment to include the co-operation with Zim.

It was revealed last week by FMC Commissioner William P Doyle that that THE Alliance was the first of the vessel-sharing groups to propose a wording in their agreement that sets up a “catastrophy instrument”, which could be used if a member fails.

It will be interesting to see whether the framework language will be extended to embrace the Med-US east coast tie-up with Zim.