THE Alliance's capacity competitive with 2M, Ocean Alliance

Time: 2016-05-19 14:03
The recently announced THE Alliance, formed as a counterweight to the 2M and Ocean Alliance, will closely match rival major vessel-sharing agreements in terms of capacity on Asia-Europe and Asia-North America routes.

The new containership alliance of at least six carriers is projected to have capacity shares of 39 percent on Asia-North America routes and 30 percent from Asia to Europe, according to an analysis by Alphaliner. The alliance won't launch in April unless its get the go-ahead from U.S., European and Chinese regulators, which will be closely looking at market shares. 

“The new THE Alliance will present a serious counterweight to the 2M and the Ocean Alliance on the east-west corridors,” Alphaliner said.

Based on capacity in existing partnerships, the newly formed THE Alliance will have an Asia-North America share equal to the 39 percent of the Ocean Alliance, which comprises CMA CGM, Cosco China Shipping, Evergreen Line and Orient Overseas Container Line. The 2M Alliance of Maersk Line and Mediterranean Shipping Co. has a projected 16 percent share.

On Asia-Europe routes, THE Alliance’s share will be slightly below the 35 percent of the Ocean Alliance and the 34 percent of the 2M, Alphaliner calculates. The three alliances will have a total 99 percent share of that market.

Creation of the THE Alliance will complete the consolidation of the largest east-west carriers into three main groupings. The new alliance will begin operation in 2017 when the the CKYHE, G6 and Ocean Three alliances disband.

THE Alliance’s membership will comprise Hanjin Shipping, Hapag-Lloyd, “K” Line, MOL, NYK Line and Yang Ming Line. Possible additional members could be United Arab Shipping Company, which is in discussion with Hapag-Lloyd on a business alliance, and Hyundai Merchant Marine, which is undergoing a financial restructuring.

The three new alliance members' current operated fleet capacity, including vessels operated outside alliances, totaled more than 17.1 million twenty-foot-equivalent units as of May 1. The 2M had the largest share, 33.5 percent, followed by members of the Ocean Alliance, 33.5 percent, and THE Alliance, 25.8 percent.

Those percentages could change with the delivery of new vessels under construction. Ocean Alliance members’ order books of new vessels totaled 1.3 million TEUs, or 43.3 percent of the east-west carriers’ total orders, as of May 1. The 2M’s orders totaled 916,800 TEUs, or 30.4 percent of the total, followed by THE Alliance’s 578,742 TEUs, or 19.2 percent.


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