Grand/New World alliances forge deeper Asia-Europe ties

   The six liner carrier members of the Grand and New World alliances said Tuesday they will join together in the Asia-Europe trade from April to provide nine jointly operated services.
   The new partnership, dubbed the G6 Alliance, will encompass more than 90 vessels from the six lines, calling at more than 40 Asian and European ports. Grand Alliance members include Hapag-Lloyd, NYK Line, and OOCL, while the New World Alliance carriers are APL, Hyundai Merchant Marine, and MOL.
   The joint alliance has been influenced by recent developments on the Asia-Europe trade, most notably industry leader Maersk Line’s Daily Maersk network, and a pending alliance between Mediterranean Shipping Co. and CMA CGM, the second and third largest global lines.
   “The new partnership will create one of the leading networks in the Far East-to-Europe and Far East-to-Mediterranean container shipping markets,” the lines said in a statement. “The integrated cooperation of these six lines will enable product and service features to be easily adjusted to market requirements. This is a milestone agreement that significantly improves service coverage in the Asia-Europe market. We will offer sailing frequencies and direct coverage that compete with anyone in the market.”
   Seven of the services will be Asia-Northern Europe loops, while the remaining two will connect Asia with the Mediterranean.
   The two alliances are already tightly integrated on the Asia-Europe lane. According to American Shipper liner research affiliate ComPair Data, the two alliances currently run a collective eight loops between Asia and Europe: the Grand Alliance’s Loops A, B, and C, the New World Alliance’s AEX, JEX, CEX, and SCX, and the jointly-run EU M/MED service.
   On the EU M/MED, the New World lines provide five ships and the Grand members four. The Grand Alliance lines also take slots on two existing New World Alliance services, the Hyundai-operated AEX and the APL/MOL-operated SCX, while the New World carriers take slots on the Grand Alliance’s Loop B (with APL also providing one ship on the service).
   The Grand Alliance also has an existing slot sharing agreement with Zim. It takes slots on Zim’s EMX service between Asia and the Black Sea, while Zim takes slots on all three of its Asia-Europe loops. It’s unclear how Zim will be affected by the wider scope of the G6 Alliance.
   The New World Alliance, meanwhile, also partners with CMA CGM between Asia and Europe. CMA CGM takes slots on the New World’s AEX, SCX, and JEX loops, while the New World lines take slots on CMA CGM’s FAL 1 service. Those partnerships will be ended when CMA CGM’s alliance with MSC begins in March.
   As for the nine new services to be rolled under the G6 moniker, the preliminary rotations are:

• Loop 1: Japan, Hong Kong, Cai Mep, Singapore, Jeddah, Rotterdam, Hamburg, Southampton, Le Havre, Singapore, Hong Kong, and Japan. This loop is roughly analogous to the Grand Alliance’s Loop A, which is currently operated with 10 NYK vessels with an average capacity of 8,926 TEUs, and the New World’s JEX service, run with 10 MOL vessels with an average capacity of 6,720 TEUs.
• Loop 2: Dalian, Xingang, Busan, Qingdao, Singapore, Hamburg, Antwerp, Southampton, Salalah, Jebel Ali, Singapore, Busan, and Dalian. This is similar to the Grand Alliance’s Loop B, which is operated with 12 vessels (11 from Hapag-Lloyd and one from APL) with an average capacity of 8,721 TEUs.
• Loop 3: Shanghai, Ningbo, South China, Singapore, Tangiers, Rotterdam, Bremerhaven, Gdansk, Gothenburg, Rotterdam, Jeddah, Singapore, South China, Hong Kong, and Shanghai. The calls in Gdansk and Gothenburg would be new for both alliances, and looks to be set up to compete directly with Maersk’s AE10 loop, currently the only service to connect Asia and the two Baltic ports.
• Loop 4: Shanghai, Ningbo, South China, Singapore, Southampton, Hamburg, Rotterdam, Singapore, South China, and Shanghai.
• Loop 5: Gwangyang, Busan, Shanghai, South China, Singapore, Le Havre, Rotterdam, Hamburg, Thamesport, Singapore, and Gwangyang. This is similar to the New World’s AEX loop, operated with 10 vessels (nine from Hyundai and one from MOL) with an average capacity of 8,614 TEUs
• Loop 6: Kaohsiung, Xiamen, South China, Hong Kong, Singapore, Colombo, Southampton, Hamburg, Rotterdam, Singapore, South China, and Kaohsiung
• Loop 7: Qingdao, Shanghai, Ningbo, Hong Kong, South China, Singapore, Salalah, Rotterdam, Hamburg, Southampton, Tangiers, Port Said, Singapore, South China, and Qingdao. It’s roughly analogous to the New World’s CEX loop, operated with 10 vessels (nine from APL and one from Hyundai) with an average capacity of 6,516 TEUs.
• Loop 8: Busan, Shanghai, Ningbo, South China, Hong Kong, Singapore, Port Kelang, Jeddah, Damietta, Genoa, Marseilles-Fos, Barcelona, Valencia, Damietta, Jeddah, Singapore, and Hong Kong. 
• Loop 9 will connect Asia and the Black Sea, but the rotation has not yet been determined.

   The lines said the rotations are “base-plan” rotations and that plans are subject to change based on changing market conditions. The lines also didn’t yet specify how many, or what size, vessels would be deployed on each service.

Phillips

   ComPair Data Chief Analyst Francis Phillips said the G6 Alliance may not provide the six lines enough advantages to compete with the networks set up by Maersk and MSC/CMA CGM.
   “They may have 90 ships, but what is the average TEU?” Phillips said. “The two alliances are still competing on the transpacific and thus unable to mesh services through Europe-Middle East-Asia-North America and intra-Asia.”
   Phillips said focusing investment and cooperation on Asia-Europe alone won’t work “when they are all so unprepared for the long haul at very low rates up against the low-cost big-ship fleets of Maersk and MSC/CMA CGM, and have to consult between six or seven members before responding to anything.”
   The G6 also lags behind Maersk and MSC/CMA CGM, Phillips said, in terms of development of competitive multi-trade hub and spoke systems, individually or collectively.
   “None of them has a network of own terminals and mega-hubs ready-developed in competitive locations,” he said. “And all the new Grand/NWA ships will be arriving too late for this war.”
   Together, the six lines currently have only two ships of larger than 10,000 TEUs, though they collectively have more than 60 such ships on order. For context, Maersk currently has 20 and MSC has 38.
   What’s more, Maersk currently has 48 ships on order, with an average capacity of 10,866 TEUs, while MSC has 43 ships on order, with an average capacity of 11,415 TEUs. – Eric Johnson