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Delayed containers caused by restructuring shipping alliances

Recently there was some turmoil in the maritime sector. According to reports exports in Northwest Europe are still delayed because of capacity problems at the vessels. Experts point to the bankruptcy of Hanjin last year and a restructuring of the alliances of shipping lines as the cause of the problems. In the meantime exporters are confronted with the problems.

The delays are longest on routes to the Middle-East and Asia, they can last up to six weeks. Amongst others, french-fries producers are hit by the delays. Export manager of Agristo, Jon Heylen, reports on the Dutch website Boerenbusiness about the extra costs these delays result in. He wonders who will be paying for the extra costs.

The delays come hand in hand with higher prices in the container shipping. Last month the Dutch newspaper Financieel Dagblad reported about the US Department of Justice was starting an investigation in to the big shipping companies. There are suspicions of illegal price agreements. Shipping companies often work together in alliances. “Alliances enable container shipping lines to optimise networks and benefit from economies of scale,” tells Marko Mihajic of Mearsk Line. “This potentially allows the individual alliance partner to market competitive services that are attractive to customers: more ports and direct services, better coverage and higher frequency.”

However, the structure of the alliances has recently changed. Out of four alliances only three survived: 2M, THE Alliance and Ocean Alliance. These alliances announced new schedules that started this month. Surprisingly there was an increase in price for containers on the routes between Europe and Asia. The last years shipping lines were confronted with overcapacity and extremely low prices. Maersk points at the changes in the market. “The industry is undergoing change. We have seen recent consolidation and changes in alliances. While alliances overall benefit the customer, the formation of a new alliance is disruptive for customers in the short term. When a container shipping line moves from one alliance to another both alliances need to redo their networks. There will be shorter and longer periods with frequent changes to services and offered capacity and fluctuating reliability.”

“2M has been stable for more than two years and is the only alliance not to undergo major changes in 2017.” Further the shipping line underscores that their focus will be on finding a balance between demand and supply. “This is a requirement in order to remain cost leaders and be able to provide and develop competitive services.”

More information:
Maersk Shipping
Marko Mihajić
T: +48 22 541 42 68
M:+48 695 999 687

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