FMC’s Doyle says Cosco and China Shipping will take time before selecting container alliance

FMC’s Doyle says Cosco and China Shipping will take time before selecting container alliance

One of the heads of the US Federal Maritime Commission has discussed how container alliances are likely to change in the wake of the various ocean carrier mergers.

In a release sent yesterday, Commissioner William Doyle noted that Cosco and China Shipping, who belong to different alliances – CKYHE and Ocean Three respectively – will take time before choosing which alliance they will go with. Doyle was in China last month and met with executives from both Chinese firms.

These companies are looking for flexibility including transition periods for determining which alliance a newly formed entity could join, if any,” Doyle said, adding: “Indeed, these companies are mindful that shippers and customers are not disrupted during any merger phase.”

Doyle suggested that all the merger activity might not be as chaotic to container alliances as some analysts are claiming.

“Many of the alliances currently exist in a form that is already quite flexible—meaning that the alliances rely on ships being contributed to the trade routes within in an alliance from carriers who are not necessarily members of that specific alliance,” he noted, adding: “In addition, carrier members of an alliance charter space to carriers who are not members of a specific alliance. Finally, many of the carriers participate in services that are not part of an alliance but may be within the geographic scope of the alliance.”

As well as Cosco and China Shipping coming together, CMA CGM’s buyout of Neptune Orient Lines will likely see NOL subsidiary APL pull out of the G6 and move to Ocean Three in 2017.

 

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.

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