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Mega shipping alliances bring better A-E service, lower rates, says Drewry

SHIPPERS are expected to benefit from a greater choice of services, and most likely lower freight rates, with new carrier mega alliances set to shake up market share on the key Asia-North Europe liner trade, according to Drewry Shipping Consultants.

Mega shipping alliances bring better A-E service, lower rates, says Drewry
29 January 2015 - 18:57

Mega shipping alliances bring better A-E service, lower rates, says Drewry

SHIPPERS are expected to benefit from a greater choice of services, and most likely lower freight rates, with new carrier mega alliances set to shake up market share on the key Asia-North Europe liner trade, according to Drewry Shipping Consultants.

The 2M Alliance of Maersk Line and Mediterranean Shipping Company, which currently has 31 per cent of weekly westbound capacity, will extend its leading market position, but not by so much as to attract further scrutiny from European competition regulators.

Newark's Journal of Commerce cited the London-based analysts as saying there could be up to three new weekly services at the beginning of the second half with the scheduled delivery of additional ultra large containerships.

This is expected to "give shippers even more choice and likely suppress freight rates".

The O3 trio - CMA CGM, UASC, and CSCL - has the largest number of 13,000 TEU+ vessels due for delivery this year and is the smallest alliance in the trade with 21 per cent of weekly capacity. It's set to leap frog ahead of the G6 Alliance that accounts for 24 per cent of weekly capacity by year-end.

G6 carriers Hapag-Lloyd, NYK, OOCL, APL, Hyundai Merchant Marine and MOL, also have the weakest port coverage and transit times, while their lack of large vessels will cost them market share and cramp their ability to cut slot costs.

With the CKYHE carriers - Cosco, "K" Line, Yang Ming, Hanjin Shipping and Evergreen - accounting for 24 per cent of capacity, the four alliances control every service on the trade. 

"Closer inspection of the schedules reveals that the alliances are far from uniform and between them they have created a pretty well-balanced network with wide port coverage at both ends of the trade," Drewry noted.

Shippers can choose between 14 weekly services from Shanghai to Rotterdam, and can call on 16 carriers to get the most competitive freight rate quotes. Time-sensitive shippers also enjoy a wide array of transit times between the two ports, ranging from 28 to 36 days.

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