Navigating the New Era of Shipping Alliances: What to Expect in 2023

Introduction: A Seismic Shift in Ocean Freight

The ocean freight industry is on the brink of a major transformation. Come April 1st, 2023, we'll witness a significant reshuffling of shipping alliances that will reshape the landscape of global maritime trade. This change comes on the heels of an unprecedented wave of mergers and acquisitions in the shipping industry, setting the stage for a new era of collaboration and competition.

In this comprehensive analysis, we'll explore the implications of these changes, how they might affect your supply chain, and how FreightAmigo's Digital Logistics Platform can help you navigate these choppy waters.

The New Alliance Landscape

The shipping industry is moving from four major alliances to three. Let's take a closer look at how this new structure will look:

1. 2M Alliance

- Members: Maersk and MSC - Services: 25 loops - Notable changes: Increased services on the Asia-Northern Europe route from five to six

2. THE Alliance

- Members: NYK, MOL, K Line, Yang Ming, Hapag-Lloyd (with UASC) - Services: 32 loops - Notable changes: Will be the only alliance offering a service to the Middle East and Red Sea from Asia

3. Ocean Alliance

- Members: CMA CGM, Evergreen, OOCL, COSCO Shipping - Services: 40 loops - Notable changes: Offers the most services overall, with a strong presence in Asia-Middle East and Asia-Red Sea routes

These three alliances will represent an astounding 77.2% of global container capacity and 96% of all East-West trades. This concentration of power in the hands of a few alliances will have far-reaching implications for the entire logistics industry.

Impact on Global Trade Routes

The reshuffling of alliances will lead to significant changes in service offerings across major trade routes:

Asia-Northern Europe Route

Both THE Alliance and Ocean Alliance will operate 11 weekly services on this crucial trade lane. The 2M Alliance has increased its offerings from five to six weekly services, partly due to its agreement with HMM and Maersk's acquisition of Hamburg Süd.

Asia-US West Coast Route

Ocean Alliance takes the lead with 13 services, followed closely by THE Alliance with 11. The 2M Alliance offers five services on this route.

Asia-Middle East and Red Sea Routes

Ocean Alliance dominates this sector with seven services, while THE Alliance offers only one. Notably, 2M does not provide any services on these routes.

The Ripple Effect on Ports

The alliance reshuffle will have a significant impact on ports worldwide, with some emerging as winners and others facing challenges:

Port of Singapore: The Big Winner

Singapore is set to benefit the most from this reorganization. It will see an increase in weekly calls from 29 to 34 across the 29 Asia-Europe services provided by all three alliances. This boost is largely due to CMA CGM's acquisition of APL and its subsequent joint venture with PSA-Singapore.

Port Kelang and Hong Kong: Facing Challenges

Unfortunately, Singapore's gain comes at the expense of other Asian ports. Port Kelang in Malaysia will see its weekly calls reduced from eleven to five. Hong Kong port is expected to be the biggest loser, with a significant reduction in weekly calls for both Northern European and Mediterranean loops.

European Ports: Rotterdam Maintains Its Lead

On the European side, Rotterdam Port will continue to serve as the key hub. However, Hamburg Port will lose one weekly service from the Ocean Alliance.

Potential Disruptions and Delays

As with any major industry shift, the launch of these new alliances may not be without its challenges:

Initial Disruptions

Shipping consultant Drewry has warned that immediate disruptions appear "inevitable" due to the lack of confirmed port services. This uncertainty could potentially impact all players in the supply chain, including shippers, ports, truckers, and railroads.

Lack of Information

As of now, there's a notable lack of detailed information regarding schedules, vessel assignments, and port rotations, particularly from the Ocean Alliance and THE Alliance. This information gap could lead to confusion and potential delays in the early stages of the transition.

Safeguards and Contingency Plans

Learning from past experiences, particularly the Hanjin Shipping collapse in 2016, industry stakeholders are taking steps to mitigate risks:

THE Alliance's Emergency Fund

THE Alliance has established an emergency fund to ensure operational continuity in case of a member's financial distress. This fund aims to protect customers' cargo and ensure it reaches its destination without disruptions.

Call for Industry-Wide Measures

US Federal Maritime Commissioner William Doyle has called for alliance-wide safeguards to prevent supply chain disruptions similar to those caused by Hanjin's collapse. He emphasizes the need for all components of the supply chain to work together to ensure cargo reaches its destination.

How FreightAmigo Can Help You Navigate These Changes

As the shipping industry undergoes this significant transformation, it's crucial to have a reliable partner to help you navigate the complexities of global logistics. FreightAmigo, as a full-service Digital Logistics Platform, is uniquely positioned to assist you in adapting to these changes:

1. Real-Time Quote Comparisons

With our Digital Platform, you can compare door-to-door freight quotes for international courier, airfreight, sea freight, rail freight, and trucking solutions. This feature allows you to quickly adapt to changes in alliance services and find the most cost-effective and efficient shipping options.

2. Comprehensive Shipment Tracking

Our platform connects with more than 1000 reputable airlines and shipping lines, allowing you to track your shipment status anytime, anywhere. This level of visibility is crucial during times of industry change and potential disruptions.

3. Streamlined Customs Clearance and Insurance

FreightAmigo offers one-stop solutions for arranging customs clearance and cargo insurance. This integrated approach can help you navigate any regulatory changes that may arise from the alliance reshuffle.

4. Automated Documentation

Our Digital Logistics Solution automates shipment documents, reducing the risk of errors and delays that could be exacerbated during this transition period.

5. 24/7 Expert Support

With round-the-clock access to logistics experts, we ensure that you have the support you need to address any challenges or questions that may arise as the new alliances take shape.

Conclusion: Embracing Change in the Shipping Industry

The reshaping of shipping alliances marks a significant milestone in the evolution of global trade. While it presents challenges, it also offers opportunities for increased efficiency and innovation in the logistics sector. By staying informed and partnering with forward-thinking Digital Logistics Platforms like FreightAmigo, businesses can not only navigate these changes but thrive in this new landscape.

As we move forward, the key to success will be adaptability, transparency, and collaboration across the entire supply chain. FreightAmigo is committed to providing the tools and support necessary to help our clients succeed in this dynamic environment.

Are you ready to navigate the new era of shipping alliances? Contact FreightAmigo today to learn how our Digital Logistics Solution can help you stay ahead in these changing times.