THE much-vaunted shipping container alliance may prove to disappointing in providing rate stability and improvements in shipping services promised its proponents, says top Alphaliner analyst Tan Hua Joo.
Speaking at the Ship Finance & Investment Conference in London, Mr Tan said that initial enthusiasm may not last any longer than it did in the shipping consortia of 30 years ago when price wars broke out among supposedly trusting partners.
The trend towards mega ships and alliances may not be enough to provide stability over the longer term, he said.
Mr Tan said the desire for partners among shipping lines was sparked by Maersk's move towards 18,000-TEUers and the launch of its 'conveyor belt" Daily Maersk service in 2011.
But when even mighty Maersk couldn't drum up enough cargo, it advanced the P3 alliance proposal, which together with MSC, CMA CGM, and a 45 per cent Asia-Europe market share, would bring about stability, they said.
But the market share was too much for Beijing, which banned the project, which in turn re-presented itself as a Maersk-MSC 2M union, shorn of CMA CGM, which promptly joined UASC and China Shipping which had hastily put together their Ocean Three alliance,
Then the long-standing lone ranger of world shipping, Taiwan's Evergreen, which hadn't even joined the banned but venerable Far Eastern Freight Conference, suddenly signed on the with the CKYHE alliance, adding its "E" the other initials provided by Cosco, "K" Line, Yang Ming and Hanjin.
Rounding out the cargo hunting packs for this year's shipping fox hunt is the G6 alliance made up of APL, Happing Lloyd, Hyundai Merchant Marine, MOL, NYK and OOCL.
Mr Tan predicted more owners order bigger ships in the 14,000-TEU plus range, but no sooner had he spoken, there was news that Evergreen and MOL, revealing they were in the market for 18,000-TEUers.
Freight market recovery will still have to happen before charter rate recovery can happen, said Mr Tan, and for that, the east-west trade will have to drive the process.
OPINION
11 November 2014 - 00:04
Alphaliner: Alliances may be as durable as 1980s' consortia - that is, not very
THE much-vaunted shipping container alliance may prove to disappointing in providing rate stability and improvements in shipping services promised its proponents, says top Alphaliner analyst Tan Hua Joo.
OPINION
11 November 2014 - 00:04
Alphaliner: Alliances may be as durable as 1980s' consortia - that is, not very
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