Policy & Compliance
with more than 80 direct port calls. From MSC’s viewpoint, perhaps the highest risk agreement is with the Israeli carrier ZIM. The three- year agreement covers services from Asia to both the US East Coast and Gulf Coast trades. MSC schedules MSC’s published 2025 schedules feature transits via the Cape of Good Hope and the Suez Canal. The question is, does the relationship with an Israeli carrier jeopardise the latter? Recent reports indicate that the Houthis have ballistic missiles capable of sinking vessels, but they have chosen not to use them. In the USA, the Federal Maritime Commission (FMC) on 9 September gave approval to the Gemini Cooperation between Hapag-Lloyd and Maersk so that it can become operational. The regulator did advise that it would be monitoring how this alliance operates, but as yet no details have been announced regarding the services/operations being offered beyond a fairly generic statement that both carriers intend to align their services aiming for 90% schedule reliability. Ironically, the only alliance that will remain the same is the Ocean Alliance (including CMA CGM, COSCO, Evergreen and OOCL). Without doing anything it will climb to top spot in terms of fleet size and market share, positioning itself as the leading force in global trade. What will be the impact? In reality we do not know what the impact of these changes will be. Many observers monitor such developments but the impact on BIFA Members remains unclear. Maritime has a remarkable ability to deal with such changes and almost everything else it has to cope with. These changes should be regarded in the light of recent history including a pandemic, a long-lasting Red Sea crisis and a war in the Ukraine. Looking forward, the expense of de-carbonising the sector is looming large and these new arrangements will be in place when that process commences fully. To summarise, the new arrangements have resulted in the following scenario: • MSC with 853 vessels and a capacity of 6.1 million TEU (approximately 20% of global trade) is largely ‘going it alone’, although it does have vessel sharing arrangements with ZIM; • The Ocean Alliance of CMA CGM, COSCO, OOCL and Evergreen continues (the largest alliance); • The alliance comprising ONE, Yang Ming and HMM will become the Premier Alliance (the smallest alliance); • 2M is being dissolved and Maersk and Hapag-Lloyd have formed the Gemini Cooperation. Clearly the pecking order in the international container market has changed over the last few years. MSC’s expansion programme has seen it rise to be the world’s largest and most powerful carrier, and in this sector size does matter. A considerable achievement for a shipping line based in landlocked Switzerland.
“ Clearly the pecking order in the international container market has changed over the last few years. MSC’s expansion programme has seen it rise to be the world’s largest and most powerful carrier
with a capacity of 6 million TEU. This gives the carrier a near 20% global container market share. MSC has announced standalone East/West trade lanes comprising five trades with 34 loops. These services cover Asia to Northern Europe, the Mediterranean, North America, transpacific and transatlantic. New slot arrangements Amongst the headlines, the announcement by MSC of a potential weekly service via the Red Sea/Suez, in addition to the Cape of Good Hope routing, received relatively little attention. Whilst MSC feels confident of its capabilities westbound, probably due to lower traffic volumes eastbound, the carrier has formed new slot arrangements, a point that we will return to later in this article. Currently Hapag-Lloyd is part of the six-line THE Alliance but, when the 2M Alliance ends in 2025, three carriers – Ocean Network Express (ONE), Yang Ming and HMM – will re-launch as the Premier Alliance and enter a slot sharing agreement covered by a five- year agreement, while Hapag-Lloyd will join Maersk to form the Gemini Cooperation. In addition to its participation in the Premier Alliance, ONE announced improved global coverage
November 2024 | 15
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