New ship­ping al­liance sets sail

COSCO-led part­ner­ship to take on cur­rent mar­ket dom­i­nance by Dan­ish-Swiss group 2M

China Daily (Canada) - - LIFE - By ZHONG­NAN zhong­nan@chi­

China COSCO Ship­ping Corp Ltd and three part­ners, in­clud­ing France’s CMA CGM SA, on Wed­nes­day an­nounced a new ship­ping part­ner­ship, OCEAN Al­liance, formed to chal­lenge 2M— the world’s largest con­tainer car­rier al­liance.

Formed by Den­mark’s Maersk Line and Switzer­land’s Mediter­ranean Ship­ping Co SA, 2M started its oper­a­tions in 2015, and con­trols more than 2.1 mil­lion twenty-foot equiv­a­lent units, and man­ages more than 200 ves­sels.

Other mem­bers of the new COSCO al­liance are Tai­wan­based Ev­er­green Line and Hong Kong’s Ori­ent Over­seas Con­tainer Line.

The al­liance will bring ser­vice re­li­a­bil­ity and in­te­gra­tion of the lat­est ves­sels in a fleet of more than 350 con­tainer ships. The de­ploy­ment will ini­tially cover more than 40 ser­vices glob­ally, mostly con­nected with Asia.

Al­pha­liner, a French mar­itime re­search firm, es­ti­mated the OCEAN Al­liance will have around a 30 per­cent share of the global con­tainer ship­ping mar­ket, sim­i­lar to the mar­ket share owned by 2M es­pe­cially on the Asi­aEurope and Pa­cific routes.

“This new part­ner­ship will al­low each of its mem­bers to bring sig­nif­i­cantly im­proved ser­vices to its re­spec­tive cus­tomers,” said Yu Zeng­gang, ex­ec­u­tive vice-pres­i­dent of China COSCO Ship­ping.

Yu said ship­pers will have an at­trac­tive se­lec­tion of fre­quent de­par­tures and di­rect calls to meet their sup­ply chain needs, in­clud­ing ac­cess to a vast net­work with the largest num­ber of sail­ings and port ro­ta­tions con­nect­ing mar­kets in Asia, Europe and the United States.

Sub­ject to reg­u­la­tory ap­proval by com­pe­tent TOP 10 ship­ping com­pa­nies world­wide by con­tainer ship fleet ca­pac­ity as of March 22, 2016 (in TEUs) au­thor­i­ties, the new al­liance plans to be­gin oper­a­tions in April 2017. The ini­tial pe­riod of the al­liance will be five years.

OCEAN Al­liance will en­able each mem­ber to of­fer com­pet­i­tive prod­ucts and com­pre­hen­sive ser­vice net­works cov­er­ing the Asia-Europe, Asia-Mediter­ranean, Asia-Red Sea, Asia-Mid­dle East, trans-Pa­cific, Asi­aNorth Amer­ica East Coast, and trans-Atlantic routes, the mem­ber car­ri­ers said in a joint state­ment.

Yin Zhen, deputy di­rec­tor of trans­port plan­ning at the In­sti­tute of Com­pre­hen­sive Trans­porta­tion at the Na­tional De­vel­op­ment and Re­form Com­mis­sion, said the new part­ner­ship will cer­tainly split up three of the cur­rent four main East-West al­liances — 2M, O3, CKYHE and G6.

Fur­ther de­tails about OCEAN Al­liance and the tran­si­tion plans for the four mem­ber lines will be com­mu­ni­cated to stake­hold­ers and the mar­ket in due course, said the state­ment.

Dong Li­wan, a ship­ping in­dus­try pro­fes­sor at Shang­haiMar­itime Univer­sity, said China COSCO Ship­ping wanted to form a stronger al­liance to chal­lenge 2M’s as­cen­dancy in the East-West trad­ing route, as well as cut con­nec­tions with cer­tain weak part­ners within the cur­rent al­liances to pre­vent fur­ther fi­nan­cial losses.

Al­liance mem­bers will also share co­or­di­nated sail­ing sched­ules, com­mer­cial in­for­ma­tion and land-based lo­gis­tics net­works which can help cut costs.

“In ad­di­tion, slow eco­nomic growth in both de­vel­oped and de­vel­op­ing mar­kets has caused more than one-third of over­ca­pac­ity of ves­sels. This has put more fi­nan­cial pres­sure on ship­ping com­pa­nies to cut the num­ber of em­ploy­ees and they are strug­gling to cover their costs,” said Dong.

This new part­ner­ship will al­low each of its mem­bers to bring sig­nif­i­cantly im­proved ser­vices to its re­spec­tive cus­tomers”


Maersk Line Mediter­ranean Ship­ping CMA CGM COSCO Ev­er­green Line Hapag-Lloyd Ham­burg Sud Group Han­jin Ship­ping Ori­ent Over­seas Con­tainer Line United Arab Ship­ping Co 565,113 1.54 mil­lion 929,700 916,439 646,918 621,243 564,117 3.01 mil­lion 2.66 mil­lion 1.79 mil­lion

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