Global Shipping Alliances

Industry Trends

17 January 2023• 8 min read

Global Shipping Alliances

Global Shipping Alliances

Raghav Sand

Each alliance is built on these vessel-sharing contracts, which let carriers within an alliance widen their service areas and geographical reach.

The carriers have put in the effort to benefit the overall sector. Whether you realise it or not, you've probably already benefitted from alliances.

Ocean alliances have developed as global logistics have changed to keep up with a world that is changing quickly. Each alliance's member shipping lines have changed throughout time, and their market share has varied as well.

Here, we examine in detail the three principal maritime alliances that shape the world and their influence.

What Are Ocean Alliances?

Cooperative partnerships of carriers are known as ocean alliances. To serve the largest possible portion of the ocean transportation market, the carriers agree to vessel sharing contracts. Carriers combine their fleets of cargo ships inside each alliance. Each carrier now has access to all the other carriers in the alliance's owned or contracted ships in addition to their own. Additionally, it indicates that carriers may transfer containers for one another.

The major alliances continue to handle most of the global trade, but since 2020, capacity limitations have pushed the debut of practically every new service outside of the typical vessel-sharing associated with alliances, even if these services were largely developed by alliance members. Due to the extremely strong demand and the resulting prices, this latest development is probably only a temporary change.

Carriers and Alliances

There are three major ocean partnerships:

a. 2M

b. Ocean

c. THE

There were four alliances a few years ago, but just like any other cooperative, goals can change, people can join or leave, and organisations can break up.

2M Alliance

Maersk and MSC make up the 2M Alliance. A ten-year vessel-sharing agreement on Transpacific, Transatlantic, and Asia-European routes was reached in 2015. Strategic collaboration agreements between 2M and ZIM and HMM were previously in place, but HMM joined THE Alliance in 2019.

Additionally, outside of the alliance agreements, MSC, Maersk, and ZIM also run transatlantic and transpacific services.

Ocean Alliance

Evergreen, CMA, COSCO, and OOCL make up the Ocean Alliance. Following clearances from China, the US, and Europe for antitrust and antimonopoly violations, COSCO bought OOCL in 2018. In the Transpacific commerce, CMA and COSCO also offer several non-alliance services.

THE Alliance

Hapag-Lloyd, ONE, HMM, and YML make up THE alliance. Recently, this alliance has made headlines for improving US Gulf port operations on Transatlantic routes. The alliance includes every member East-West service.

Standardization of Technology

Ocean alliances primarily concentrate on business collaboration, although several top carriers have joined forces to address the problems brought on by a lack of technology standardisation.

To promote digitization, standardisation, and interoperability in container shipping, they established a non-profit organisation in 2018. This group, which is not really a result of an agreement, represents Maersk, MSC, CMA, Hapag, and ONE.

Ocean Alliance and Shipping Routes

The three ocean alliances sail along the principal trade routes around the globe. Depending on the region, their market share varies. The Ocean Alliance dominates the commercial lanes between Asia and North America, capturing roughly a third of the market. With slightly more than a quarter of the market, 2M comes in second.

The Ocean Alliance holds just under 40% of the market share on trade lanes connecting Asia and Europe, with 2M close behind. Ocean comes in second place behind 2M in terms of market share on the commerce routes connecting Europe and North America.

Booking Strategies and Shipping Alliances

Is there a way to use ocean alliances for your company's advantages?  In large part, alliance activities might not be important to you whether you're an importer or exporter. The carriers have put in the effort to benefit the overall sector. Whether you realise it or not, you've probably already benefitted from alliances.

Many businesses also don't give much consideration to the actual vessel that transports their product. The conditions of the contract with the carrier are more significant than the name painted on a ship's side. Even if your cargo is moved by another member of an ocean alliance, these terms still apply.

However, you might want to consult your freight forwarder at the booking stage to determine if there are any tactical options:

A carrier may become more appealing through alliances. For instance, if two carriers are offering the same price but one is a member of an alliance with a more reliable partner, you might allow the alliance to decide a tie. Because they employ each other's ships, if two carriers are in the same alliance, you may assume that their performance will be similar.

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