Double Crown Resources Inc. (fka DDCC)

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Growth in the containerized commodity shipping industry is creating more and more opportunities for Double Crown's Translock Squared transport system. Here's another new development.

Container shipping’s new Ocean Alliance is born
Greg Knowler, Senior Asia Editor JOC.com
Apr 20, 2016 5:52AM EDT

Link:
http://www.joc.com/maritime-news/container-lines/ocean-alliance/container-shipping%E2%80%99s-new-ocean-alliance-born_20160420.html

The Ocean Alliance was born in Shanghai on Wednesday as CMA CGM, China Cosco Shipping, Evergreen Lineand OOCL signed a memorandum of understanding to offer more than 40 global services connecting markets in Asia, Europe and the United States.

Subject to regulatory approvals, the new alliance plans to begin operations in April 2017 and will last for five years, the carriers said in a joint statement. “This new partnership will allow each of its members to bring significantly improved services to its respective customers. Shippers will have … access to a vast network with the largest number of sailings and port rotations connecting markets in Asia, Europe and the United States.”

The service networks in the alliance will cover the Asia-Europe, Asia-Mediterranean, Asia-Red Sea, Asia-Middle East, trans-Pacific, Asia-North America East Coast and trans-Atlantic trades using the latest vessels from a fleet of 350 container ships.

Rodolphe Saadé, vice chairman and member of the board of directors of CMA CGM Group, said the Ocean Alliance was a very ambitious operational agreement. “CMA CGM, and its new partners, will offer more than 40 maritime loops, providing its customers with an enhanced network of services and fast transit times,” he said in a statement. Initially, the deployment will cover more than 40 services around the world, mostly connected with Asia, including about 20 services each in U.S.- and Europe-related trades.

“Joint service cooperation is an essential part of our own strategic planning,” said Lawrence Lee, CEO of Evergreen Marine Corp. “This new alliance enables us to optimize fleet deployment and offer competitive service to meet customers’ changing demand.”

Andy Tung, CEO of OOCL, said the alliance would be a platform for the carrier’s ongoing growth as well as improve costs and efficiency. “The extensive network and port coverage of the new alliance will offer our customers a wide range of choices and highly competitive services for their supply chains,” he said. A Cosco statement said Ocean Alliance was a better match for the line’s globalization strategy following the merger between Cosco Group and China Shipping.

The alliance is aimed at blunting the power of the major vessel-sharing agreement between the two largest global container lines, Maersk Line and Mediterranean Shipping Co., the 2M Alliance, which is the only one of the four alliances that will remain unaffected by what will be a massive reshuffling. Global alliances will change dramatically in the wake of CMA CGM’s December 2015 acquisition of Neptune Orient Lines and its APL shipping line, as well as the February merger of state-owned carriers Cosco and China Shipping.

Carriers in the CKYHE and G6 alliances will have to scramble for new partners to counter the 2M and the new alliance. Maersk and MSC combined control 27.7 percent of the global container ship fleet, according to industry analyst Alphaliner. The combined quartet of CMA CGM, China Cosco Shipping, Evergreen Line and OOCL would control 23.5 percent of the global fleet. The members of the new alliance and the 2M would control a total of 51.2 percent of global container ship capacity.

If Ocean Alliance gets past regulators, APL and OOCL will have to leave the G6. That will force the remaining four members — Hapag-Lloyd, Hyundai Merchant Marine, MOL and NYK Line — to find new partners or join other alliances. The same holds true for the remaining members of the CKYHE Alliance — “K” Line, Yang Ming and Hanjin Shipping — because fellow members Cosco and Evergreen will have a new home. With CMA CGM gone and China Shipping merged with Cosco to form Cosco China Shipping, the remaining member of the Ocean Three, United Arab Shipping Company, is also likely to seek new alliance partners.

Highly integrated vessel-sharing agreements, or alliances, allow members to mitigate overcapacity by sharing the use of their larger vessels and avoid financial losses accrued by operating less-than-full ships. Slot-sharing is hardly new, but the degree of integration through alliances, and their reach, certainly is — today, they make up roughly 90 percent of container capacity on major trade lanes. Like traditional slot-sharing, alliances are strictly operational, which means joint marketing and sales are forbidden.

Contact Greg Knowler at [e-mail] and follow him on Twitter: @greg_knowler.