New alliances will have fewer direct port calls
Greg Knowler, Senior Asia Editor | Mar 08, 2017 1:25AM EST
As carriers begin extricating themselves from their current vessel sharing agreements and reposition ships in preparation for the launch of the new Ocean Alliance and THE Alliance on April 1, an analysis of the new networks has revealed a surprising loss of direct port connections.
Now that the complete network details have finally been made available by the carriers, maritime analyst SeaIntel found that on both Asia-Europe and the trans-Pacific, a significant number of direct port-to-port combinations will be removed.
With 78 port-pairs lost, Northeast Asia-Mediterranean is the sub-trade that will see the largest loss of connectivity and product differentiation with the launch of the new alliances, SeaIntel found.
Port Klang will be highly impacted negatively by the new upcoming networks in terms of connectivity to North European ports. “In fact, given the large consensus among the new alliances to rely on either Singapore as Southeast Asia hub, as is the case for Ocean and THE alliances, or Tanjung Pelepas as is the case for 2M Alliance, Port Klang will be offered significantly less on this trade,” according to the analyst.
There will be 22 lost port-pairs within the Southeast Asia-Mediterranean sub-trade. The majority of these lost port-pairs show that especially connectivity from the hubs of Port Klang and Tanjung Pelepas to Mediterranean ports will decrease significantly. While five port-pairs out of Singapore will disappear, the new alliance networks will offer four new products out of Singapore to Mediterranean ports, all from the Ocean Alliance.
SeaIntel found the trans-Pacific trade will also experience a significant loss in product diversification, as the new alliance networks will “massively” reduce the number of direct port-pairs. A total of 150 direct port-pairs will no longer be available when the new alliances begin, and only 56 new port-to-port combinations will be offered compared to the current network.
In addition to this, the port-pairs that remain in both the current and new alliance networks will see a massive loss in service frequency, with 135 out of 354 remaining port-pairs seeing a decrease in service frequency, according to the analyst.
“This will have a clear impact for shippers and forwarders, as less direct combinations will necessarily lead to more cargo needing to be transshipped,” was SeaIntel’s conclusion.
Carrier preparations for the new alliances are creating problems in Europe, where repositioning or withdrawing of vessels has contributed to chronic space shortages on vessels leaving for Asia. This has affected most carriers on the Europe trade, including Japanese liner NYK Line.
NYK, currently a member of the G6 Alliance, is preparing for its start in THE Alliance from April 1. “Due to vessels sliding out of service or changing into new service we are confronted with blank sailings on some loops,” NYK told customers in an advisory.
NYK said all services for all loading ports in Europe to Asia were full. “Therefore it has been decided not to take any new (additional) bookings for sailings up to mid-April in order to get current overbooking situation under control. The weekly volume as per tender award is and will be honoured but we are not able to accept anything above,” the carrier said.
Other preparations for the new alliances are also being made. For instance, Yang Ming Line has suspended its electronic data interchange scheduling facilities as it readies to join Hapag-Lloyd, MOL, NYK and “K” Line in THE Alliance, although the Taiwan carrier emphasised that no operations or booked cargo would be affected.
“Current services with sailing schedules will be valid through March only, the new services are still under discussion. As a result, we’ll suspend EDI of schedules until a new service structure is finalised,” Yang Ming said in a customer notice.
A spokesperson for Orient Overseas Container Line said its EDI continued to operate as usual and the Hong Kong-based carrier has already started taking bookings for the Ocean Alliance services. He said OOCL was working with its customers to prepare them for the transition from the G6 to the Ocean Alliance.
APL CEO Nicolas Sartini told JOC.com that the Ocean Alliance was ready to go with all the vessel names, transit times, cut-offs and terminals available to BCOs. “Usually we take bookings two to three weeks in advance and all the information shippers need to start making bookings is available,” he said.