Mega alliance brings sea change in industry
Formation of the P3 pact by Big Three sets tone for shake-up as small players seek to consolidate or strengthen co-operation to stay afloat
The shipping industry looks set for a shake-up next year as minor players seek to consolidate or strengthen co-operative agreements in response to the formation of a mega alliance by the world's three largest lines.
The Big Three - Maersk, Mediterranean Shipping Co (MSC) and CMA CGM - said in June they would form a vessel-sharing agreement on the Asia-Europe, transpacific and transatlantic trade links from the second quarter of next year.
Smaller lines have since begun looking for ways to remain competitive as the P3 alliance seeks to maximise the use of up to 2.6 million teu (20-foot equivalent units) in cargo-handling capacity. This will mean the Big Three can now compete with lower freight rates amid a shipping downturn.
In response, CKYH, an alliance between Cosco Container Lines (Coscon), K-Line, Yang Ming Marine Transport and Hanjin Shipping, was looking to acquire new members while strengthening existing partnerships, a Coscon executive said.
But China Shipping Container Lines (CSCL), initially believed to be planning a firmer alliance with CKYH, is now rumoured to be seeking to join the P3 instead.
"The news now is that CSCL, together with its partner United Arab Shipping Co [UASC], is seeking to join the P3 network, bringing with them 10 of the world's latest and largest vessels - 18,000-teu 'Triple-E' ships with a fuel efficiency that is 35 per cent lower on a per-teu-carried basis," a source said. "But I doubt if P3 will accept the approach as the pair has pretty different cultures and management styles."
