The reshaping of container alliances and their East-West liner schedules for 2025 took a big step forward this week with the release of a second draft network plan by the Gemini Cooperation partners, Maersk and Hapag-Lloyd, a new list of services for THE Alliance (ONE, HMM and Yang Ming) – which is to be rebranded Premier Alliance when it formally starts in February 2025 – and a fresh network brochure from the soon-to-be independent again MSC, reports Drewry.
Slot exchange agreements
On top of that, there was news of slot exchange agreements between MSC and Premier on Asia-Europe, and between MSC and Zim for the Transpacific.
Earlier this year, Drewry hosted a webinar to consider the future competitive positions of liner alliances post-Gemini, during which we correctly identified new partnership opportunities for MSC and the remaining THE Alliance members, as well as between MSC and Zim.
The defection of Hapag-Lloyd to Gemini from THE Alliance put the left-behind trio in a difficult position to fill the capacity shortfall, but we viewed MSC as being amenable to a looser cooperation with them that would enable it to enhance its service offering, without constraining it to a more rigid alliance deal, such as it had with Maersk in 2M.
The MSC and Zim agreement was easier to predict as the two carriers already had pre-existing co-operation agreements in the Asia-WCNA and ECNA trades (the latter via 2M) as well as a range of other joint services connecting South Asia with the East Mediterranean, the East Med with North Europe, and East Asia with Oceania.
Were it any other two carriers of radically different sizes, such a large-scale cooperation across multiple trades would make us think a take over approach was imminent. The reason we dismiss it as a possibility here is MSC’s historic policy of organic growth and Zim’s de facto status as a strategic national asset for Israel.
While the flurry of news on alliances and network plans does answer some of the questions we raised in our previous presentation, including the most pressing ones facing carriers in THE Alliance/Premier, there are still many more outstanding.
This is because, with no end in sight to Houthi attacks on shipping and Red Sea diversions, both MSC and the Gemini carriers thought it prudent to create two versions of their new network plans, offering up Suez and Cape of Good Hope routing contingencies.
During a meeting ahead of the press release, senior members from both Gemini partners told Drewry that a decision will be made in October as to which version will go live from February next year.
Neither would be drawn on which version they think is the more likely to be activated, nor would they give a timeline for the expected full-scale resumption of Suez Canal transits. But with one Gemini representative saying that there is “no credible end in sight” to the diversions and that they will only consider Suez when it is completely free from the risk of attack, we can confidently assume that the Cape of Good Hope version is the current default network setting.
Adding to the uncertainty of what the finished alliance products will look like, the Premier Alliance didn’t provide alternatives in its initial release, but did say that it will update to include rotations routing via the Cape of Good Hope “in the coming days.” At the same time, its list did not include any details for Transatlantic services, which it says will be updated separately.
The Ocean Alliance (CMA CGM, Cosco and Evergreen) hasn’t announced any changes to its existing “Day 8” network, effective since April 2024.
Upon review of both network versions from Gemini and MSC, aside from routing options, the alternative versions are fundamentally very similar. The port coverage is almost identical, although a handful of port calls are dependent on particular route choices, while the sequencing of calls occasionally differs for the same service.
MSC has the same number of weekly East-West services, 34, in both versions, with the Swiss carrier reporting that it will offer approximately 100 more direct port pairs via Suez than via the Cape of Good Hope, around 1,900 versus some 1,800, respectively.
Gemini’s number of mainline services does differ between the two versions: 27 in the Suez setting and 29 in the CoGH setting. This is the result of not including one mainliner Asia-Suez-USEC “TP17” loop from the former schedule plan, and by adding three Mediterranean-Jeddah connections to the latter setup.
Under the Cape of Good Hope configuration, Gemini said that it would require 341 vessels aggregating 3.7 mteu, which is 41 more ships than in the Trans Suez option. It translates to about 9% greater teu capacity demand for CoGH versus the Suez option, and indeed the original launch plan.
In January the plan was for 290 vessels (3.4 mteu) to operate on 26 mainline services with 32 feeder shuttles in Europe, Middle East, Asia and the Gulf of Mexico. The number of shuttles has been paired back to 30 in both Suez and CoGH versions.
The main differences in the alternative network versions of both Gemini and MSC can be found in the transit time matrices, with Cape of Good Hope configurations unsurprisingly extending lead times for shippers (see Table 1 for a couple of examples).
Did you subscribe to our daily Newsletter?
It’s Free! Click here to Subscribe
Source: Drewry
