THE Alliance Faces Challenges Post-Hapag Exit

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  • Following Hapag-Lloyd’s departure next year, THE Alliance is expected to become the weakest container shipping group, according to AlixPartners.
  • The consultancy suggests that THE Alliance should explore cooperation with MSC to maintain competitiveness.
  • MSC will operate independently after Maersk joins forces with Hapag-Lloyd to establish the Gemini Cooperation.
  • AlixPartners notes that THE Alliance members, ONE, HMM, and Yang Ming, will need to address their reduced combined capacity of 2.5 million TEU without Hapag-Lloyd to stay competitive.

Challenges and Strategy Shift

AlixPartners highlights the challenges faced by THE Alliance, particularly on the Asia-Europe and transatlantic routes. The recent extension of cooperation among Ocean Alliance members further complicates THE Alliance’s position. Analysts suggest THE Alliance may consider slot arrangements on specific routes instead of a comprehensive alliance arrangement.

Potential Impact on Rate Dynamics

If THE Alliance does not strengthen its position, the reshuffling of alliances could result in four distinct cooperatives vying for volume on key head-haul trades, potentially limiting rate increases. THE Alliance’s reduced capacity may impact its ability to compete effectively, especially on critical trade routes.

Future Arrangements and Industry Response

While THE Alliance members refrain from commenting on external speculation, Yang Ming’s spokesperson mentioned that new arrangements would be announced in 2025. MSC, which already has a Vessel Sharing Agreement (VSA) with Zim Line, has not provided comments on potential collaboration with THE Alliance.

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Source: The Loadstar