Importers and exporters alike take note—ocean carriers are undergoing their biggest reshuffling in a decade, and their shifting alliances will play a key role in upcoming contract negotiations for 2025.
On Feb. 1, Maersk and Hapag-Lloyd officially commenced their Gemini Cooperation vessel-sharing alliance, shaking up agreements both container shipping firms previously had been a part of with other carriers.
The Ocean Alliance of CMA CGM, Cosco Shipping, Orient Overseas Container Line and Evergreen remains the same, already extending its collaboration until March 2032. The alliance’s updated “Day 9” service network will go into effect in April.
And With Hapag-Lloyd leaving THE Alliance, remaining members Ocean Network Express, Hyundai Merchant Marine and Yang Ming rebranded as the Premier Alliance, effective in February.
Mediterranean Shipping Company (MSC), Maersk’s former 2M alliance partner, now operates a stand-alone service.
The services differ depending on market coverage, reliability and costs, among other factors. For example, the Ocean Alliance has the widest reach, sharing 380 container ships across 37 services on major trade routes, and will lead the way in the trans-Pacific market with 15 sailings to the U.S. West Coast and eight sailings to the U.S. East Coast.
At the same time, MSC will remain the dominant player in the Mediterranean Sea with six weekly services in the region and 34 loops worldwide, and hangs its hat on establishing direct port calls worldwide over speed.
“Altogether we are going to provide 1,900 direct port combinations because we believe that clients want that certainty of a direct destination call, and that direct connections are more important than speed,” said MSC CEO Soren Toft, during the International Association of Ports Harbours annual World Port Conference in October. “Ours is a network that reflects the future of a more dispersed supply chain.”
Given the larger uncertainty that has spread across the global supply chain, whether it be the Red Sea-driven port congestion or geopolitical trade tensions, businesses are likely to benefit by working with multiple alliances at once.
“If you’re a shipper, you don’t want to put all your eggs in one basket,” Philip Damas, founder and head of Drewry Supply Chain Advisors, told Sourcing Journal.
DHL Global Forwarding is one logistics firm that has already committed to working with different alliances and shipping lines to hedge the risk of disruption and price volatility in the transition period.
“We think it’s important to spread the services and risk across all these alliances,” said Jacob Moe, global head of full container load at DHL Global Forwarding, on a January webinar. More noted that these agreements should be conducted with several different carriers to “balance your service profile, your cost profile and your risk profile.”
Even as businesses and logistics providers alike look to diversify their shipments, the new pacts aren’t going to come without some short-term speed bumps.
Judah Levine, head of research at freight booking marketplace Freightos, expects some short-term disruption when the first of the alliances take shape in February.
“Vessels have to get to different services than they were scheduled on just a few weeks prior, so there’ll be an adjustment period that could mean poorer schedule reliability. There’s more of a possibility of vessel bunching and delays from that,” Levine said. “If things are disrupted and you have congestion, then that restrains capacity a little bit.”
For example, the number of blanked sailings at ports on both the Asia-Europe and trans-Pacific routes in February are expected to be over 50 percent higher than last year, according to container shipping analysis firm Linerlytica.
With concerns over the future of service, Maersk and Hapag-Lloyd aim to stand out with their own reliability goals.
The Gemini Cooperation says that it will deliver schedule reliability of 90 percent when its new network is fully phased in after the Feb. 1 launch. That phase-in is supposed to take 13 weeks, putting both carriers under significant pressure to reach the lofty goal.
Damas noted that shippers are still skeptical of the carriers’ ability to reach this figure, and rightfully so.
While Maersk substantially outperformed 12 other major carriers in schedule reliability in November 2024 at 61.9 percent, the total remains roughly 28 percentage points off the Gemini goal. Hapag-Lloyd has a much longer way to go, coming in at 53.5 percent, according to maritime trade advisory service Sea-Intelligence.
Both ocean carriers have defended the decision, with Maersk CEO Vincent Clerc saying in an Oct. 31 earnings call that the companies ran a lot of tests in recent years that gave them confidence that they could reach the 90 percent threshold across its 29 mainline services and 342 shared vessels.
“We did not go out with that number lightly,” Clerc said. “Doing it right the first time with high quality is going to be cheaper than operating a network with this 50 percent reliability.”
Clerc said the hub-and-spoke model will have fewer port calls and “cleaner” rotations, lowering the chance that an individual port disruption gets transmitted into the wider network.
Hapag-Lloyd CEO Rolf Habben Jansen said in a Nov. 14 earnings call that the ships will be better utilized than previously, as there won’t be situations where the vessel takes five or more ports to fill up.
“In the Gemini network, you will have two or three port calls, then the ship is full. Then we offload it in the hub and basically turn it around or make one or two more calls,” Habben Jansen said. “That gives you, on average, better asset utilization. if you have better asset utilization, you can transport more cargo with the same number of ships across the entire network.”
The carrier does not expect to see any significant loss of market share due to the alliance switch, but indicated that it will be hit by added costs in the first and second quarters.
Despite the overall concerns of the shipping shakeup, Sea-Intelligence has argued that the transition for the alliance networks will be smoother than expected given the time the carriers have been able to prepare for the switch.
“There will be some operational hiccups—that is unavoidable when hundreds of vessels change schedules,” Sea-Intelligence noted in a Jan. 12 report. “But this is happening during the slack season after Chinese New Year, and should hopefully be manageable.”
Analysts have noted that the shifting alliances could bring in a period of increased competition for the carriers—at least in the short term— which in the end benefits the shipper paying to transport the goods.
“They’re competing for new customers, essentially, as the alliances reworked,” Levine said. “If you have increased competition, that would push rates down.”
According to Peter Sand, chief analyst at freight benchmarking platform Xeneta, carriers are offering higher price ranges to existing customers than they are to new clients.
“They may seek to milk existing customers because they trust they will stick around in uncertain times,” Sand said. “They have been increasingly active in acquiring new customers, as opposed to offering significant discounts to existing ones.”
