FMC: Third Container Alliance Coming Soon

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Published May 11, 2016 8:27 PM by The Maritime Executive

On May 5, at an industry gathering, Federal Maritime Commissioner William Doyle gave new hints on the creation of a "third force" container shipping alliance to counter the influence of heavyweights 2M and the recently formed Ocean Alliance. 

"Of the original alliances, [the formation of the Ocean Alliance] leaves eight companies in the balance. I can tell you that by the end of next week there is a likelihood that another new alliance will be announced. I will be meeting with ocean carrier representatives next. It may not include all of the remaining eight carriers, but it could eventually," he said. The potential partners excluded from Ocean Alliance include UASC, K Line, Yang Ming, Hanjin, Hapag-Lloyd, Hyundai Merchant Marine, MOL and NYK. 

Hapag and UASC have separately announced discussions towards a cooperative agreement, potentially leading either to vessel sharing or to a merger. Hanjin and HMM are both engaged in restructuring following steep and protracted losses, and their financial weakness prompts some to question whether they will be involved in the new formation. However, their creditors have expressed an interest in speeding up their reorganization in order to give them the best chance to join in alliance talks, and both lines told IHS Fairplay in late April that they were participating in discussions with other carriers. 

Analysts say that as spot rates are far down this year, alliances are especially important to carriers for pooling of resources and utilization of the largest, most efficient ships. Observers like Maersk Group CEO Nils Andersen have suggested that lines left out of alliance agreements will have to reconsider their strategies quickly – whether refocusing on regional and feeder routes or on a select set of long-haul routes.