Table 2

Table 2 shows the position between Asia and North America at the beginning of June, from which it can be seen that the G6’s market share of 35% well exceeds the EU’s 30% guideline, and member lines are also allowed to belong to a discussion agreement, so can recommend common surcharges and rate increases. Should Evergreen be allowed to join the CKYH alliance, their joint market share of effective vessel capacity would also just exceed the guideline. Source: Drewry Maritime Research.

Ocean carriers are clearly not yet done with mega-alliance expansion following China’s rejection of P3. Maersk and MSC’s subsequent 2M agreement is only the latest. Evergreen and the CKYH alliance are still talking to the US’ Federal Maritime Commission (FMC) about extending the scope of their operating agreement between Asia and Europe to include the US, and CMA CGM has yet to clarify who its new partners will be. The hot money is on CSCL and UASC.

New partnerships are required as no one has yet come up with a better alternative to reduce costs and improve service frequency at the same time, short of take-overs and mergers. Some may claim that mega-alliances are little better than price-regulating cartels, but poor to non-existent ocean carrier profitability since their introduction argues otherwise. As in the airline industry, where just three alliances handle the majority of passenger traffic, ocean carrier alliances handle the majority of East-West container traffic, and less integrated vessel-sharing agreements handle much of the North-South traffic. As ships get larger, even bigger cooperation agreements between more carriers will be needed to squeeze out economies of scale.

More at Maritime Executive; sourced from Drewry Maritime Research