Competition unaffected by mega-alliance launches

The start of mega-alliance operations on the East-West container trades this month is not reducing competition or service differentiation, according to Drewry Maritime Research.

The four mega-alliances – 2M, CKYHE, G6 and Ocean Three – currently each have between 21\%and 31\% of the Asia-North Europe trade. But while the four alliances now represent virtually all capacity on the lane, this does not mean that shippers are not getting a fair deal on service
options, according to the analyst.

“The Asia-North Europe trade post-alliance restructure is generally well-balanced in terms of geographical coverage, with strong competition in the key lanes,” said Drewry. “The broad range of options made available to shippers means that accusations that the industry is completely homogenised are unfair.”

According to Drewry, the total number of weekly Asia-North Europe services has been reduced from 22 to 21 compared with December 2014, and the number of ships deployed in a fixed-day weekly pattern has subsequently come down from 245 last month to 232 as smaller ships having been cascaded away from the trade. But despite these changes, the available capacity has largely been maintained, with westbound slots down just 1\% on December due to the deployment of more new Ultra Large Container Vessels.

The formation of the mega-alliances has also not resulted in the feared standardisation of services, leaving competition down to price alone. All of the four alliances are well covered to the main markets of Germany, Netherland, UK, France and Belgium, with the 2M also offering a few specialist calls to Scandinavia (Aarhus and Gothenburg) and Poland (Gdansk).

“Closer inspection of the schedules reveals that the alliances are far from uniform and between them they have created a pretty well-balanced network with wide port coverage at both ends of the trade,” concluded Drewry.

“Importers and exporters can have little complaint about the range of options available. For example, there are 14 weekly services from Shanghai to Rotterdam, the two busiest ports in the trade. That means shippers can call upon 16 carriers – not to mention non-alliance slot charterers – to get the most competitive freight rate quotes.

“For the more time-sensitive shippers, the alliances also provide a wide array of transit times to suit their needs. Looking at Shanghai to Rotterdam again, transit times range from a quickest of 28 days to a slowest of 36 days.”

source:www.lloydsloadinglist.com