Proposed Mega-Containerships Alliance 2M: Analysis

By George Backwell
Tuesday, July 15, 2014
Carrier Shares of Effective Vessel Capacity from Asia to North Europe, June 14: Image DMR

Maersk and MSC have just announced a mega vessel sharing agreement that will replace their failed P3 alliance early next year. It will be smaller, and compare well in size with the G6 and CKYH alliances – but what about CMA CGM? Drewry Maritime Research consider the question in their latest 'Container Insight Weekly' excerpted here as follows:

Maersk and MSC have taken on board China’s objections to the P3 alliance by coming up with a new vessel sharing arrangement called 2M that they hope will be agreed by all regulatory authorities before the beginning of next year. Out has gone CMA CGM, in order to bring the agreement’s market share down to more acceptable levels, and in has come a much simpler joint co-ordination committee to monitor the carriers’ network on a daily basis.

The objective remains the same – namely to reduce costs by sweating assets more efficiently between Asia/Europe, Asia/US and Europe/US, but as port rotations and vessel sizes have not yet been clarified, it is not possible to say how their market shares will change, or their undeniable savings compare with that envisaged by P3.

Drewry’s analysis shows that on the Asia-North Europe trade route, Maersk and MSC currently have a 32% share of all effective westbound vessel capacity, which is more than the 30% market share threshold normally allowed under the European Union’s consortium regulation, so will require close scrutiny [see Figure 1 shown here, and noted: Effective vessel capacity = total vessel capacity less estimated space allocated to wayport and out of scope cargo
; P3 = Maersk, MSC and CMA CGM; CSAV assumed to be independent of Hapag-Lloyd].

Maersk currently provides 21.3% on its own, and MSC/CMA CGM provide another 21.2% through joint services shared fairly evenly, which would have given the P3 alliance a much bigger share of 42.5%. Only six weekly services are planned by 2M instead of nine, but the VSA will still be the trade lane’s largest.

On the Asia/USWC route, 2M is planning four weekly services, whereas P3 was expecting to run six. At present, Maersk, MSC and CMA CGM share four weekly schedules. Between Asia and the USEC, two services will be provided, the same as at present, but two less than planned by P3.

On the US-North Europe route, 2M will operate three weekly services – the same number planned by P3, which reflects the fact that CMA CGM’s capacity share on the route is relatively small.  2M will probably be the second-largest alliance in the trade lane, after G6, in Drewry’s estimation.

As 2M will not include joint marine operations, with each party looking after its own duties, including stowage, voyage planning and port operations, service quality could be very different to that envisaged by P3. Will a shipper loading a container on an MSC ship really get the same schedule reliability as when loading on a Maersk ship, for example, as Drewry has consistently recorded a lower level of reliability for MSC?

Maersk will want to continue its Daily Maersk service guarantees between Asia and Northern Europe, which could create further friction between the two new partners.
It is not yet known whether 2M will negotiate joint operational contracts. If this does happen, it will be a concern to terminal and intermodal service operators, but an opportunity for the larger operators to secure more market share.

A bigger concern will be the future of CMA CGM, as it has been sharing vessels with MSC between Asia and Northern Europe, and with Maersk between Asia and the Mediterranean, since 2011, so will not be able to fill its ULCVs on its own reasonably. The game of musical chairs of the mega-alliances means that CMA CGM will now have to seriously consider a closer East-West vessel-sharing arrangement with someone else, therefore, the most obvious candidates being UASC and CSCL. Both have recently ordered 18,000 teu mega-ships, and have worked with CMA CGM in the past – but there are other options.

They may be needed, as CMA CGM has 28 ships of 9,000 teu on order, some of which are more suitable for North-South trades.

Drewry's view
2M will become the largest alliance on the Asia-Europe route, if approved. Like other alliances, it will help reduce costs, and should be allowed.

Source: Drewry Maritime Research

 

Maritime Reporter July 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

TSB Investigating Ferry, Pleasure Craft Collision

The Transportation Safety Board of Canada (TSB) is deploying a team of investigators to Laval, Quebec, following a collision between the ferry Paule II and a pleasure craft which occurred on August 1.

First Vessel of New Rescue Class Launched

Global shipping and energy services firm, Craig Group, has launched its first F-Class vessel, the Grampian Fortress. The IMT 958 multi-role emergency response and

MacArthur Lock Dewatered for Emergency Repairs

The U.S. Army Corps of Engineers, Detroit District, announced the MacArthur Lock, located on the Soo Locks at Sault Ste. Marie, Mich., is experiencing mechanical

Contracts

GE Gas Turbines to Power US Navy’s New Destroyers

The U.S. Navy’s new DDG 121 and DDG 122 Arleigh Burke-class destroyers will be powered by eight LM2500 marine gas turbines supplied by GE Marine, who also received

Tanker Retrofitted with Dual Fuel Engine

Caterpillar Marine informs it has begin a dual fuel engine retrofit conversion onboard the 472-foot Fure West tanker, owned by Furetank Rederi A/B. The MaK M 43

Diana Charters Containership to Maersk

Container shipping company Diana Containerships Inc. announced that, through a separate wholly-owned subsidiary, it entered into a time charter contract with Maersk

Finance

Harper Government Invests in Naufrage Harbor

The Honorable Gail Shea, Minister of Fisheries and Oceans, announced today an investment to improve safety and working conditions for fishermen at Naufrage Harbor, Prince Edward Island.

Strategic Marine’s Stock Program Full Power Ahead

Strategic Marine, the specialist shipbuilder and fabricator, has confirmed its stock program of personnel transport vessels is market-ready. “Our stock program

Shift to Contract Labor in U.S. Maritime, Offshore Sectors Underway

Maritime and Offshore recruiter Faststream has reported a shift in attitude towards temporary, project and consulting work following a recent survey to over 1,000 candidates in North America.

Container Ships

Diana Charters Containership to Maersk

Container shipping company Diana Containerships Inc. announced that, through a separate wholly-owned subsidiary, it entered into a time charter contract with Maersk

Boxships Collide in Port Klang, Malaysia

The container ships MOL Empire and Northern Democrat collided at around 1430 LT Aug 1 in Westport harbor at Port Klang, Malaysia, reportedly while mooring.   Container or containers fell overboard,

Hapag-Lloyd Adds Halmstad to Rotation

As one of the top global carriers Hapag-Lloyd offers a comprehensive service network and will add port of Halmstad, Sweden to the Nordic Short Sea Network. As

Logistics

First Vessel of New Rescue Class Launched

Global shipping and energy services firm, Craig Group, has launched its first F-Class vessel, the Grampian Fortress. The IMT 958 multi-role emergency response and

Renovated Research Vessel Sets Sail

French scientific research vessel completely renovated in life extension project. French research vessel Marion Dufresne II left Damen Shiprepair Dunkerque (part

Diana Charters Containership to Maersk

Container shipping company Diana Containerships Inc. announced that, through a separate wholly-owned subsidiary, it entered into a time charter contract with Maersk

Consulting

Jonathan Appointed LOC Group's London MD

In line with LOC’s continual global growth and strengthening of the senior management team,  Britain has been appointed as Managing Director of the London operation.

Ross is Fleet Manager, Heidmar

Heidmar announced the promotion of Duncan Ross to Fleet Manager. Duncan joined Heidmar’s London office in 2012 as vessel manager.  Prior to joining Heidmar,

Rolls-Royce Takes Davies on Board

Rolls-Royce appointed Alan Davies as a Non-Executive Director. He will join the Board with effect from November 1, 2015 and will become a member of the Nominations and Governance Committee,

 
 
Maritime Security Maritime Standards Naval Architecture Navigation Pipelines Pod Propulsion Salvage Ship Simulators Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2615 sec (4 req/sec)