New Mega Alliances

The new mega alliances in the container shipping industry came into being on 1st April 2017 and these three groupings will collectively provide no less than 92% of deployed capacity on the major East/West trade lanes. Although global demand is showing signs of recovery, the container shipping industry is nevertheless still characterised by overcapacity.

 

April 1st has marked the début of two new alliances:

• The Ocean Alliance made up of Orient Overseas Container Line, Cosco Shipping Line, Evergreen Line, CMA CGM with its APL brand and;
  
• THE Alliance, consisting ofNYK Line, MOL, ‘K’ Line, Yang Ming Line, and Hapag-Lloyd-United Arab Shipping Co.
  

 

This article analyses the capacity deployed by the new alliances on the main East/West trade lanes.

 

Based on the latest edition of our Containership Databank, MDS Transmodal estimates that the Ocean Alliance will be the dominant player on the East/West routes with about 34% of the total capacity deployed on these trade lanes (see Figure 1). Also above the 30% market share is the 2M Alliance, which has increased its share since May 2016 (see Figure 2) due to the number of alliances decreasing from four to three. Drilling down to the three major trade lanes on the East/West routes, the 2M Alliance has increased its capacity on all of them, with the major increase reported on the Asia-Europe trade lane (up from 33% in May 2016 to 40% in April 2017). THE Alliance has an estimated 26% market share.

 

Figure 1: Deployed capacity in April 2017, market share by alliance on the East/West routes - current agreements

Source: MDS Transmodal Containership Databank, April 2017

Figure 2: Deployed capacity in May 2016, market share by alliance on the East/West routes - old agreements

Source: MDS Transmodal Containership Databank, May 2016