An alliance forged by six of the world’s largest multi-services shipping companies is expected to revolutionize the maritime industry in the next five years and beyond.
The new partnership, dubbed as “The Alliance,” is an expanded alliance of G6 and CKYHE, and is expected to counter the dominance of global giants Maersk Line and Mediterranean Shipping Co. (2M).
The new alliance was announced simultaneously in Hamburg and Seoul, and is composed of industry leaders Nippon Yusen Kaisha, Hanjin, Hapag-Lloyd, K-Line, Mitsui O.S.K Lines, and Yang Ming Transport Corp.
The massive integration plan is expected to create a reliable shipping service in the East-West Trade lanes, which covers Asia-Europe/Mediterranean, Asia-North America West Coast, Asia-North America East coast, Transatlantic and Asia-Middle East/Persian Gulf/Red Sea.
Statements from the official websites of the partner firms said that the binding agreement is scheduled to be implemented in April 2017 subject to approval of all relevant authority.
The initial term of cooperation will be five years.
The move, they said, will build one of the leading networks in the container shipping industry combining approximately 3.5 million TEU (twenty-foot equivalent unit) which reaches 18 percent share of the global container fleet capacity.
TEU is the standard unit for describing a ship’s cargo carrying capacity, or a shipping terminal’s cargo handling capacity. A standard 40-foot container is equivalent to two TEUs.
All six partners operate advanced and competitive fleets with a total of more than 620 ships, which will be the basis of a dedicated fleet deployed into the groups’ future service portfolio.
With their combined resources, the partner firms pointed out that their clients will be able to enjoy an outstanding product characterized by fast transit times, high-frequency sailings and expansive port coverage.
“This agreement is a milestone and will enable the six partners of The Alliance to offer sailing frequencies and direct coverage in the market,” member carriers said in a statement.
“The unique product will feature enhanced port coverage in Asia, North America, Europe including the Mediterranean as well as 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,” it added.
Jeremy Nixon, NYK Chief Executive Officer, in a separate statement, expressed confidence that the move would yield the expected results envisioned by the partner companies when they agreed to form The Alliance.
“Some external parties may be artificially trying to raise concerns about there being major disruptions when the switch takes place. In reality, the members have plenty of experience in terms of creating and disengaging from joint agreements, and typically this is carefully planned in advance, and timed to coincide seasonally with the weakest demand period,” Nixon said.
“It will be in everyone’s interests to be as cooperative as possible, and to ensure that the disengagement and reengagement process is handled as smoothly as possible post Chinese New Year 2017,” Nixon added.
Hapag-Lloyd, a German-Chilean leading global liner shipping firm, has 177 modern container ships with approximately 9,500 staff at more than 366 locations in 118 countries. It is the world’s fifth largest container carrier in terms of vessel capacity.
Hanjin Shipping, on the other hand is South Korea’s largest and one of the world’s top 10 container carriers that operates some 60 liner and tramper services around the globe transporting over 100 million tons of cargo annually. Its fleet consists of some 170 container ships and bulk carriers.
Hanjin has four regional offices located in the U.S., Europe, Asia and South East and West Asia, approximately 5,800 global staffs as well as 12 container terminals in the world’s major ports.
Mitsui O.S.K Lines Ltd. (MOL) is a Japanese-owned international transport company. Its major shareholders are Japan Trustee Services Bank, Ltd., The Master Trust Bank of Japan, Ltd., Mitsui Sumitomo Insurance Co., Ltd. Sumitomo Mitsui Banking Corp. Trust & Custody Services Bank, Ltd., The Nomora Trust and Banking Co., Ltd., Mizuho Bak, Ltd., The Bank of New York Mellon SA, State Street Bank West Client-Treaty and Sumitomo Life Insurance Company.
The MOL Group is operating 896 fleets and has some 10,508 employees.
Yang Ming Marine Transport Corp. is a Taiwan-based shipping company. It currently operates 85 container ship and 17 bulk carriers.
Yang Ming’s service scope covers over 70 nations with more than 170 service points.
K-Line is also a Japanese shipping company with overseas offices in Manila, Middle East and Yangon.
K-Line is operating 68 container ships, 369 bulk ships, 48 energy transport and tanker ships, and 65 others vessels for other businesses.