Steamship line alliances and impact

There are just ten global steamship lines left in the industry following takeovers, mergers, and closures. Remember losing Hanjin to bankruptcy in 2017? Over the last few years these carriers have organized into three alliances. The alliances allow the carriers to share space and container volumes through vessel sharing agreements within the alliance. Here’s how they come together:

Ocean Alliance

  • Members: CMA/APL – COSCO/OOCL – Evergreen
  • Controls 29% of the Asia to USA Trans-pacific marketfreight forwarding
  • 19 weekly services from Asia to USA

THE Alliance

  • Members: ONE Group – Hapag Lloyd – Yang Ming lines – HMM
  • Controls 25% of the Asia to USA Trans-pacific market
  • 19 weekly services from Asia to USA

M-2 + ZIM

  • Members: Maersk – MSC – ZIM
  • Controls 22% of the Asia to USA Trans-pacific market
  • 11 weekly services from Asia to USA

This structure gives carriers control of pricing by sharing the cost of pulling (blanking) vessels out of service within the alliance to match capacity with container demand. Operating within a network the carriers can adjust capacity quickly, keeping space tight and rates steady.

When container volumes start to increase, carriers can be slow in returning vessels into the system. By delaying deployment of parked vessels, they drive up demand for space, allowing them to increase spot market rates. So far in 2020, overall United States import container demand is down from 2019 but rates are up due to the record number of blank sailings the carriers have pulled out of the system.

For importers, it’s a good idea to diversify your international supply chain as much as possible. Working with a quality forwarder with competitive steamship line contracts across the alliances helps to balance both service and pricing risk to value and benefit from changing market conditions.

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