Unabhängige Zeitung zu Wirtschaft und Verkehrspolitik
CENTRO INTERNAZIONALE STUDI CONTAINERS
ANNO XXXVIII - Numero APRILE 2020
ALLIANCES, CARRIERS AND LOGISTICS
It's certainly been an interesting past few months in the
container shipping industry; from the upcoming IMO 2020 Low Sulphur
Fuel requirements, Brexit (Yikes!), US-China tariff negotiations;
it's refreshing to get back to basics and talk about the container
industry. However, today the container business seems to be more
logistical than purely shipping. What's new in alliances?
Nothing, actually, but it's a decidedly different box ship
business today than that of 20 years ago. With container ships
jumping from 5,000 TEU Panamax to 23,000 TEU Mega jumbos, carriers
need huge amounts of cargo to fill these ships - and that's only
possible with cooperative vessel-sharing agreements. So alliances
are more important than ever. But, providing cheap container
carriage from A-to-B is no longer sufficient; one needs to be an
integrated logistic provider to survive profitably.
Beyond Ocean Transport
The biggest carriers are focusing on improving their value
beyond that of pure ocean transport. Maersk, MSC, and CMA CGM, are
expanding their service offerings into what would traditionally be
considered 3PL services like warehousing and customs clearance,
while ONE and Hapag Lloyd are primarily focusing on improving their
core ocean transport offering and customer service, and Cosco/OOCL
are focusing on Chinese export retail shipments in their new
Eshipping partnership with JD.com.
So what does our industry look like today?
2M | Maersk & MSC; with HMM and Zim as Strategic Partners
MSC's Medlog says it's the world's geographically widest
logistics and supply chain provider, with a presence in 60+
countries, including multiple container terminals. Medlog offers
warehousing, trucking, locomotives, and barges, while Maersk/Damco
is working to transform itself into an integrated logistics
provider. Digitization is driving this end-to-end approach to
container transportation which Maersk CEO Soren Skou says provides
greater supply chain visibility, enabling logistics providers to
offer a more integrated - and profitable - approach.
Their strategic partner Zim takes slots on 2M's trans-Pacific
service, while HMM's three-year strategic partnership expires in
April 2020 (more below).
THE Alliance | ONE, Hapag Lloyd, Yang Ming
The ONE Network (Ocean Network Express) of K Line, MOL, NYK
Line, has said multiple times it does not believe in the integrated
service model, and instead will focus on traditional ocean transport
and customer service, while Hapag-Lloyd is emphasizing Bilateral ED
CMA CGM is adding CEVA Logistics to a portfolio that already
includes a significant container terminal footprint, although one
wonders how their April 3, 2019 announcement of a 16-day
China-Europe trucking service will affect their ocean freight
Strategic Partnerships & Alliances
HMM seems to think it can become one of the world's major
carriers; secured $890 million in late 2018 and ordered 20
mega-ships for delivery beginning Q2 2020 that HMM maintains it can
Their 2M partnership expires April 2020. HMM said in December
2018 it had not ruled out a renewal. No news how the 2M feels, but
Maersk's announcement 2 weeks ago of purchasing 10 feeder ships is
State-owned Korea Development Bank, HMM's primary shareholder
and lender, is now requiring accountability after 14 consecutive
loss-making quarters. However returning to profitability remains
unlikely as HMM noted in its gloomy 2019 outlook:
"Uncertainty over the cargo volumes in 2019 will continue
due to the concerns of a global economic slowdown, Brexit, and the
US-China trade conflict. HMM's burden of high fuel costs will
increase due to the US sanctions against Iran, OPEC agreeing to cut
oil production, and increase in demand for low sulfur fuel oil in
preparation for IMO 2020."
Zim recently announced that they will route the majority of its
2M slots, Prince Rupert slots, via Canadian National Railway into
Chicago, Memphis, and New Orleans; cutting both costs and delivery
time will improve their supply chain capabilities.
Additionally, Zim and the 2M will continue their
capacity-reducing efforts and remove two strings from their current
Asia-US East Coast routes as they chase declining container volume.
Not only is this is a direct contrast to HMM's expansion policy, but
offering rationalizing slots and strings in order to provide extra
value to today's costs & time-sensitive clients is the best
example of the need for alliances today.