Mega Shipping Alliance Announced
Six of the world’s largest container shipping firms have joined forces to create a new alliance. The G6 Alliance, announced this past Tuesday, will deploy 90 vessels to over 40 different ports in Asia, Europe, and the Mediterranean.
The alliance includes Korea’s Hyundai Merchant Marine, Singapore’s APL, Japan’s Mitsui OSK Lines, Germany’s Hapag-Lloyd AG, Japan’s Nippon Yusen Kaisha and Hong Kong’s Orient Overseas Container Line.
Similar to the more widely known airline alliances, the members of the G6 will maximize efficiency by sharing cargo space on their vessels.
A recent Bloomberg Businessweek article cites investment bank, RS Platou Markets AS, as indicating that container-shipping rates may rise next year on account of the new alliance. The article continues, “We are increasingly hopeful for a better 2012,” Singapore-based Platou analyst Rahul Kapoor said in an e-mailed report today. “The move will effectively put an end to fight for market share with a greater emphasis on freight rates and vessel utilization…”
More immediate results were seen as Neptune Orient Lines (NOL), which uses APL as a container shipping unit, saw it’s stock rise as much as 4.1% the day after the announcement was made.
The G6 schedule will include ports of call in Colombo, Jeddah, and Port Said, while Singapore, Hong Kong, and Shanghai will also see weekly calls. The new alliance is expected to provide healthy competition for Danish shipping giant, Maersk Line, which recently began offering its Daily Maersk service between Asia and North Europe. As the current market leader, the Daily Maersk contains 70 vessels that transport goods between four Asian ports and three European ports.
Operations for the G6 are expected to commence this April.