Asia-Europe will decide the shape of shipping in 2012
The battle for the Asia-North Europe has begun as shipping lines challenge the dominant position of Maersk Line and the new CMA CGM-MSC partnership.
When Daily Maersk was announced a couple of months ago, the industry held its breath to see what the other carriers would do about it. What Maersk was offering were guaranteed transit times between certain Asian and European destinations with the payment of penalties for late delivery.
It has almost a quarter of its total weekly capacity involved in the service using 8,000 to 15,000 TEU vessels. When the 18,000 TEU ships start arriving from 2013 they will be deployed on the Asia-Europe trade and also participate in Daily Maersk.
The Danish carrier was able to offer the service because of its size and its network. It has the ships and strings to ensure a box is picked up and delivered in time to make its deadline. Miss one sailing, take the next.
The world’s second and third largest carriers, MSC and CMA CGM, rightly perceived this new and more reliable Maersk as a serious challenge and the family run lines promptly jumped into bed. The alliance they created on the key global trades will allow them to increase the frequency of sailings and port calls. That in turn will enable the alliance to compete with Maersk on important routes such as Asia-North Europe.
It wasn’t long after the number two and three shipping lines partnered up that the Grand Alliance and New World Alliance announced that they would be joining forces on Asia-Europe.
Calling themselves the G6, and with 90 vessels on nine services calling at ports in Asia, the Mediterranean and Europe, the new alliance will compete directly with the CMA CGM-MSC partnership from April next year, as well as with Maersk.
The new alliance comprises Grand Alliance members Hapag-Lloyd, Nippon Yusen Kaisha (NYK) and Orient Overseas Container Line (OOCL), and New World Alliance members APL, Hyundai Merchant Marine and Mitsui O S K Lines (MOL).
So will three alliances on Asia-North Europe be enough? Not likely. The industry is waiting for news that the CKYH alliance of Cosco, “K” Line, Yang Ming and Hanjin announces plans to join up with other carriers on the trade, such as Evergreen and China Shipping.
Let’s face it – they have little option but to join forces. Unable to match the scale and frequency, smaller lines will not be competitive. The only alternative to teaming up is to pull out of the trade altogether.
With Maersk setting the pace, the rest of the world’s shipping lines are having to scramble to keep up. By this time next year (depending on whether you believe the Mayan calendar) we will know how successful they have been.