Hard Times make Strange Bedfellows

Ocean carriers have been sharing capacity for years. Ocean carriers pool ships, terminals, containers and capacities in order to save on the huge cost of operating merchant container fleets. It is not as common to see whole fleet alliances, consisting of multiple carriers merge services to serve a particular trade. Such is the case below.

The Grand Alliance, consisting of Hapag-Lloyd Container Line, MISC, Nippon Yusen Kaisha (NYK), and Orient Overseas Container Line (OOCL), and New World Alliance members (TNWA) APL, Hyundai Merchant Marine and MOL, are pooling their assets to serve the Asia to West Med trade.

The carriers have had an agreement to combine services to serve specific markets since 2006. Such flexibility allows the carriers to match capacity to available cargo demand. In hard economic times such as today, that flexibility takes cost out of the service while stabilizing equitable freight rates.

The carrier alliances have cooperated before to serve markets such as the Black Sea trade from Asia. That service started in June, 2008.

Grand Alliance, NWA pool services on Asia-West Med Updated December 12, 2008 2:57:53 PM clipped from The JOURNAL of COMMERCE ONLINE Two rival ocean container consortia have pooled services between Asia and Europe in the latest capacity cuts amid declining cargo volumes and tumbling freight rates on one of the biggest liner trade routes. The four-carrier Grand Alliance and the three-member New World Alliance today announced they are joining forces in a revised Asia-West Mediterranean service, halving the number of vessels currently operating the route. The new service, due to start December. 23, will be operated by eight 6,000 TEUs vessels -- six from the Grand Alliance and two from the New World Alliance. The carriers said the new service, EUM, would offer shippers “better market coverage” by including Busan and Valencia. The service rotation is Busan, Shanghai, Ningo, Chiwan, Shekou, Hong Kong, Singapore, Port Klang, Jeddah, Damietta, Genoa, Marseilles-Fos, Barcelona, Valencia, Damietta, Singapore, Hong Kong, and Busan.

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