Commentary

By Lars Jensen

What is the service landscape shippers should expect from the global alliance carriers ?

Two new alliances — the Gemini Cooperation and Premier Alliance — will see the light of day in 2025 , and both have now published their new networks . Additionally , Mediterranean Shipping Co . ( MSC ) has clearly stated it will operate as a standalone carrier , although it does have some slot swaps on the Asia – Europe trade with the Premier Alliance and with Zim Integrated Shipping Services on the trans-Pacific trade to the US East Coast .

What is the service landscape shippers should expect on the trans-Pacific from the global alliance carriers ?

The following is a deeper look into the service offerings provided by Gemini , Premier and the Ocean Alliance as well as MSC . It is based on the assumption that the Red Sea crisis will not be resolved in early 2025 , and on the assumption that the Ocean Alliance will maintain its existing network . That last assumption is because the Ocean Alliance hasn ’ t issued any new network designs for 2025 .

The alliance networks include 24 origin ports in Asia and 27 destination ports in the Americas scattered across the US , Canada , Mexico , the Bahamas , Jamaica , Panama and Colombia . As such , this makes for 648 portto-port combinations ; however , only 266 of these have a direct service . The remaining port pairs would need to be serviced via transshipments .

But what are the most well-connected ports linking Asia to North America ?

The most well-connected port pair turns out to be Yantian to Savannah . Out of the 62 services being offered by the alliance carriers , there will be nine weekly direct services linking Yantian to Savannah . Note that for linguistic simplicity , MSC is referred to as an alliance , although it has just a single member .

There are four port pairs that will see eight weekly direct services : Ningbo – Los Angeles / Long Beach , Shanghai – Los Angeles / Long Beach , Vung Tau – Los Angeles / Long Beach and Shanghai – Savannah . Furthermore , there are six port pairs with seven weekly direct services . All in all , this means that 11 port pairs will essentially be serviced daily in 2025 .

All four alliances offer Yantian – Savannah , meaning there will be heavy direct competition . But it isn ’ t the only corridor to be serviced directly by all four alliances . It ’ s merely the one with the highest number of weekly services .

In total , there are 36 different port pairs that will be serviced directly by all four alliances . As such , from a destination perspective , Los Angeles / Long Beach will have the highest number of origins serviced directly by the four alliances — Yantian , Qingdao , Ningbo , Shanghai , Busan and Vung Tau . This is followed closely by New York-New Jersey , which will see all four alliances offer direct services from those ports , except for Qingdao .

If this is instead viewed from an origin perspective , all four alliances offer direct services from Shanghai to the following nine destinations : Los Angeles / Long Beach , Oakland , Vancouver , New York and New Jersey , Norfolk , Savannah , Charleston , Mobile , and Houston . Yantian as an origin port will offer eight direct destination ports serviced by all alliance carriers , while Ningbo will offer seven such connections .

‘ Strong competitive pressure ’

But this doesn ’ t mean the alliances have all chosen to only serve the same port corridors . Across the four networks , there are 139 port-to- -port combinations that are serviced only by a single alliance , whereas the other alliances will offer this through transshipment .

This means the new network designs will present shippers with quite an element of choice , and in turn ensure strong competitive pressure among the carriers .

Clearly , the 36 port pairs serviced by all alliances will have a head-on competition with all carriers offering the same connectivity , although they will be doing so with slight variations in transit time and might have different levels of on-time reliability , as well as propensity to blank sailings .

For the 139 port pairs serviced directly by only a single alliance , whereas the others will use transshipment , this is a competitive differentiator . Whether such a differentiator warrants a higher freight rate , or a larger share of a shipper ’ s business , remains to be seen .

But one thing is clear from the new network designs : The alliances , and standalone MSC , appear to have given commercial consideration to offer service concepts that do indeed vary quite a bit from each other .

email : lars . jensen @ vespucci-maritime . com

44 Journal of Commerce | October 7 , 2024 www . joc . com