We are moving into 2018 with Chinese New Year’s capacity crunch just about behind us. Time to revisit the carrier alliances and see what’s in store for the rest of the year.
The 2M alliance:
- Vessel sharing agreement with Hyundai (HMM)
The Ocean Alliance
- CMA plus APL
- COSCO China Shipping plus OOCL
- Evergreen Line
- Hapag-Lloyd with United Arab (UASC)
- Yang Ming
- The new “ONE” group of the three Japanese carriers – NYK, MOL, and K Line starting in April
First thought: The industry has really consolidated. Not long ago, we had at least 16 independent carriers with which to work. Not anymore. Years of weak volumes, poor capacity management, and losing money, plus Hanjin going under, shook the carriers into a new reality. Consolidate and work together to control pricing and capacity or really suffer. Good news is business is back and most of the carriers made money in 2017.
Second point: Watch the consolidation of the three Japanese carriers NYK, MOL, and K Line into the “ONE” group. We all know these major consolidations never go as planned. We still don’t know who’s going to run the show in the United States. It would be wise to limit your exposure with this group until they’ve worked things out, which could take until 2019 to happen. If you do work with “ONE” be ready for service disruptions.
Third suggestion: Try to work with at least one carrier from each Alliance. It would be easy to throw all in with the 2M. They’ve been around the longest, and MSC and Maersk are in the top five as carriers go. However, the carriers through the alliances will be focused on building market share in 2018 and working their service routes for better unitization of capacity. Working with all three alliances will provide greater service and pricing flexibility, plus help divert your supply chain to one alliance if something should go poorly with your current carrier mix.