The Hour of the Networkers

 

The container shipping industry is undergoing a period of reorganization – and Hapag-Lloyd is assuming a leading role in the process. The carrier has just teamed up with five other shipping companies to forge one of the world’s largest container shipping alliances. 

 

Plans call for the new alliance – appropriately named “THE Alliance” – to officially begin operations in April 2017.

 

Together, the member shipping companies currently possess approximately 3.5 million TEU, or some 18 percent of the global container fleet capacity. This makes THE Alliance the industry’s third global network, along with the 2M Alliance of the market leaders Maersk and MSC as well as the Ocean Alliance, which was newly formed this spring. 

 

The new alliance could even raise its combined capacity to over 4 million TEU if the ships of the Middle Eastern carrier UASC are added to it. Hapag-Lloyd and UASC are currently holding intensive talks about possibly combining their container shipping operations, but the talks have yet to be concluded.

 

In addition to Hapag-Lloyd, the alliance will include the Asian shipping companies Hanjin, “K”Line, Mitsui O.S.K. Lines (MOL), Nippon Yusen Kaisha (NYK) and Yang Ming. Together, these six carriers operate more than 620 ships. 

 

Part of it is used from 2017 in the service of THE Alliance. Hapag-Lloyd will be the largest of the partners, as it currently has 175 modern container ships and a total capacity of 955,000 TEU operating in 121 liner services in all important trades.

 

In a joint statement, the new partners called their step a “milestone” that will offer customers the benefits of additional sailings and direct connections when it kicks off in 2017. 

 

This will also entail additional enhancements in port coverage in Asia, North America, Europe (including the Mediterranean) and the Middle East. “The network of THE Alliance will ensure frequent sailings, high reliability and very attractive transit times for all shippers in the East-West trade lanes,” the partner added.

 

Alliances have been common since the very beginning of modern container shipping. The basic idea behind them alliances is for different shipping companies to pool vessels for certain trades and to offer joint services in them. 

 

Each participating carrier then receives a contingent of container slots on each ship, which it can market independently and under its own name. Such alliances mainly benefit customers by offering them a greater selection of sailings and quicker connections. 

 

Shipping companies, on the other hand, benefit from joint use because it allows for better utilization of ship capacity and reduces their capital expenditures on new ships. The G6 Alliance, which currently includes Hapag-Lloyd and THE Alliance partners MOL and NYK, will be dissolved by the spring of 2017. However, combining to form THE Alliance still requires the approval of all relevant regulatory authorities.