Lawyers at global liners have been busy poring over the fine print of their alliance set-ups in the week since Hapag-Lloyd shocked its peers by ditching THE Alliance to form the Gemini Cooperation with Maersk.
While speculation is rife that a member of the Ocean Alliance might be coaxed to jump ship and join THE Alliance to help fill the void left by the exit of its largest member, Hapag-Lloyd, there’s little in the legal write-up of the Ocean Alliance to suggest it will happen soon.
Maersk’s existing partnership with Mediterranean Shipping Co (MSC), 2M, is due to expire in a year’s time and the Danish liner has been actively seeking a partner to plug capacity gaps. Last Wednesday, Maersk and Hapag-Lloyd revealed their new liner grouping, which will launch from February 2025.
THE Alliance was founded in 2016. Its membership today is made up of Hapag-Lloyd, HMM, Ocean Network Express (ONE) and Yang Ming. THE Alliance is one of three global liner alliances along with 2M and the Ocean Alliance, whose members comprise CMA CGM, Evergreen, and COSCO.
Getting a member of the Ocean Alliance to shift to the diminished THE Alliance is unlikely to happen this year or next.
Analysts at Linerlytica, an Asia-based container consultancy, note that the agreement, signed in April 2017, among Ocean Alliance members states it is fixed for a minimum of 10 years and the partners will need to give 12 months advance notice to withdraw and notice may not be given prior to March 2026 unless there is a material change in the partners’ ownership status or one of the partners becomes insolvent.
THE Alliance had similar provisions but allowed its members to give 12 months notice after April 2023, which Hapag-Lloyd utilised in order to withdraw prematurely from the arrangement that was supposed to operate until 2030. While Hapag-Lloyd’s partners in THE Alliance have deployed lawyers to look at the German carrier’s departure, the Hamburg-headquartered liner is confident there is no legal case against it.
“There is an exit clause. It says that a member can leave after announcement one year prior to leaving. We don’t expect any legal proceedings,” a spokesperson for Hapag-Lloyd told Splash.
“THE Alliance members are in a jam and will be desperate to fill the Hapag-Lloyd void,” Simon Heaney, senior manager of container research at UK consultancy Drewry, told Splash last week.
Finding a suitable replacement and having zero leverage will prove challenging, he suggested.
Lars Jensen, a former Maersk employee turned liner consultant with Vespucci Maritime, noted last week that the pressure is on ONE, HMM and Yang Ming to either lure a new partner out from Ocean Alliance or re-invent a new service concept.
Wan Hai – Could be a small replacement !