“The G6 danger is in six companies selling the same product,” Dynamar said in a report examining the impact of the Grand and New World alliances joining on the Asia-Europe trade. “This will unavoidably pull the price down, whatever the (good) intentions.
“Apart from price, new competition elements may still arise: who offers the shortest guaranteed delivery time? And perhaps: who offers the highest compensation in case of default?”
Dynamar said a better strategy might be for the consortia to merge marketing activities on the trade rather than just their operations.
“There is a limit to separate marketing,” Dynamar said. “Three multi-carrier groupings with largely the same product marketed by 16 different entities with full pricing independence: however good the product, they will never get rates up to any healthy level. The relevant carriers would be better advised to stay independent, if they choose, but to merge their Europe-Far East operations. Four daily operating consortia each with a single costs saving sales organization is probably the only recipe to get paid what they need to be able to offer a sustainable quality product.”
