BREAKING NEWS: Six Ocean Carriers Form New Alliance - Global Trade Magazine
  May 13th, 2016 | Written by

BREAKING NEWS: Six Ocean Carriers Form New Alliance

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  • THE Alliance is scheduled to begin operation in April 2017.
  • THE Alliance will combine 3.5 million TEU or 18 percent share of the global container fleet.
  • Drewry: The OCEAN Alliance came to challenge the 2M alliance in major east-west trades.

Mitsui O.S.K. Lines (MOL), , Nippon Yusen Kaisha, “K” Line, Hanjin, Hapag-Lloyd and Yang Ming have agreed to create a new alliance covering all east-west trade lanes.

A binding agreement has been concluded by all partners and THE Alliance is scheduled to begin operation in April 2017 subject to approval of all relevant regulatory authorities. The initial term of the cooperation will be five years.

The routes included in the combination include Asia-Europe/Mediterranean, Asia-North America West Coast, Asia-North America East Coast, Transatlantic, and Asia-Middle East/Persian Gulf/Red Sea.

The new partnership will build one of the leading networks in the container shipping industry combining approximately 3.5 million TEU or 18 percent share of the global container fleet capacity. All six partners operate advanced and competitive fleets with more than 620 ships in total. This will become the basis of a dedicated fleet deployed into the groups’ future service portfolio.

Ongoing discussions between Hapag-Lloyd and United Arab Shipping Company are also progressing, although an agreement on business combination has not yet been reached.It is anticipated that UASC will become part of THE Alliance, which will increase the overall alliance capacity to more than four-million TEU.

This new alliance comes weeks after four carriers—CMA CGM, COSCO Container Lines, Evergreen Line, and OOCL—announced the creation of the OCEAN Alliance, to become operational from April 2017, subject to regulatory approval. The six, or potentially seven, with the inclusion of UASC, carriers in THE Alliance, are among the eight shipping lines orphaned by the creation of the OCEAN Alliance.

According to Drewry Maritme Research, the OCEAN Alliance came to challenge the 2M alliance—comprised of Maersk and Mediterranean Shipping Company (MSC)—in major east-west trades.

Were all eight of the orphan lines to join together into a third alliance they would be a match for 2M and OCEAN in both Asia-North Europe and transpacific, according to Drewry.

At the beginning of 2016, there were four global alliances comprising 16 different carriers. Drewry predicted earlier this month that by mid-2017 there will be three main global alliances comprising 13 carriers.

With today’s announcement, the contours of Drewry’s projections are beginning to take shape.