© The Financial Times Ltd 2015 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
December 21, 2011 12:07 am
Two of the three big alliances of container shipping lines are to join forces to offer joint services on the key Asia to Europe rate, in the latest sign of how a combination of industry overcapacity and fierce competition are quickening the pace of industry consolidation.
The A6 Alliance will join the Grand Alliance – whose members are Germany’s Hapag-Lloyd, Japan’s NYK Line and Hong Kong’s OOCL – and the New World Alliance – made up of Singapore’s Neptune Orient Lines, Korea’s Hyundai Merchant Marine and Japan’s Mitsui OSK Lines. The alliance will offer seven services weekly from Asian ports to north Europe and two to the Mediterranean.
The alliance’s formation follows the announcement on December 1 by Switzerland’s Mediterranean Shipping Company and France’s CMA CGM, operators of the world’s second and third-largest container ship fleets, that they planned to form an alliance on several routes. The pair’s alliance will give them a combined fleet larger than that of Denmark’s Maersk Line, the market leader.
Container shipping alliances work like the better-known airline alliances, allowing members to share space on services operated by other members and making the best possible use of capacity.
Nils Andersen, chief executive of AP Møller-Maersk, Maersk Line’s parent, in November told the Financial Times that Maersk Line’s launch in September of the Daily Maersk service offering daily departures from key Asian ports to Europe had sparked “a little bit of panic” among rivals. Since then, Malaysia’s MISC has announced that it is quitting container shipping altogether. Another company, Chile’s CSAV, has said it is looking for a partner for its container shipping operations.
A6 Alliance members called the alliance a “milestone agreement”.
“We will offer sailing frequencies and direct coverage that compete with anyone in the market,” they said in a joint statement.
The Grand Alliance once offered more capacity on the Asia to Europe route than Maersk but has lost significant market share in recent years. Maersk bought its largest member, P&O Nedlloyd, once operator of the world’s third-largest container ship fleet, in 2005. It has also lost capacity through MISC’s withdrawal from container shipping.
The new alliance’s formation leaves only the CKYH Alliance – of China’s Cosco, Japan’s K Line, Taiwan’s Yangming and Korea’s Hanjin – unaffected among the large alliances by the industry’s current wave of reorganisation.
Copyright The Financial Times Limited 2015. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.
Sign up for email briefings to stay up to date on topics you are interested in