With the new shipping alliances controlling 97% of available capacity from Asia to Europe, it is going to be harder than ever for ordinary shippers to get the best rates and service.
On the Asia-North Europe trade the three alliances — 2M, Ocean, and THE Alliance — will be operating without direct competition and market shares of 34%, 33% and 30% respectively.
The Shipping Alliance monopoly
For the very largest shippers like multiple-retailers and supermarkets the introduction of these new services could mean faster transits and lower rates as the three alliances compete fight over their business.
The opposite may apply to smaller shippers and those shipping on other routes, who face being dismissed by the lines, unless their forwarder has the relationships and ability to negotiate directly effectively with lines in each of the three alliances.
MIQ Logistics negotiate as a major shipper, which means we can access the best rates and space guarantees as the lines add capacity
Rolling out comprehensive changes to direct services, routes and transit times is adding further complexity, to an already complex situation and means that many shippers will struggle to find the best solutions for their supply chain needs.
Altogether the new shipping alliances will control 97% of Asian-North Europe capacity, which means that it is more critical than ever that importers and exporters have effective representation to ensure they have access to the best rates and space guarantees.
The Alliances will continue rolling out service enhancements and developments that will have a direct impact on operations and transit times and which need to be factored into your supply chain planning.
More port pairs, faster, longer and new route options provide a significant opportunity to overhaul your supply chain operations and the opportunity to flex transit times to hold inventory in the supply chain.
COMING SOON: The New Shipping Alliances and how they are structured – an infographic
There are currently a total of 372 direct port pair options in the westbound leg to North Europe, with 113 (30%) of those port pairs operated by one alliance, which may reduce their willingness to negotiate on these port pairs.
The Port Pair and route situation is fluid, with more detail expected from 2M in particular
Faster and longer route options
Sixty per cent (60%) of the direct routes that the OCEAN and THE alliance are operating on the Asia-Europe trade routes now have faster transit times, offering savings of three or more days.
Over a third of the routes offered by the OCEAN and THE alliance members will be offering much shorter or longer transit options, which means that smart shippers have the capability to shorten cash to cash cycles or flex inventory time on the.
The alliances have dropped some ports from their services, which is one of the key drivers behind shorter transit times.
More options and alternatives will be apparent as the new services settle in and more schedules are made available.
New route options
New ports are spread across the three alliances and member carriers and will publish more in their schedules in coming months.
The short-term challenge for shippers is identifying the available services from specific ports, by each alliance.
Services are potentially available through each of the carriers in the alliance, which means that as the carriers and alliances add new ports, their direct port pairs and transshipment options will grow as well, improving speed and reliability.
Overall the alliances have dropped 380 and added 300 direct routes, many comprising new port pairings, on the three main trades; Asia-Europe, trans-Atlantic, and trans-Pacific.
MIQ Logistics can work with you to plan the optimum blend of service, port pairs, transit times, and lines for your supply chain.