GSF says debate is needed on whether 2M, G6, CKYHE and O3 deliver real competition, or if shippers would be better served by fewer lines competing head-on.
The Global Shippers’ Forum (GSF) is questioning whether liner carrier alliances are benefiting shippers.
“A serious debate is needed to investigate whether mega-alliances such as 2M, G6, CKYHE and O3 deliver real competition in the marketplace, or if shippers and the containership industry as a whole would be better served by fewer lines competing head-on,” said Chris Welsh, GSF’s secretary general, speaking at the Asian Logistics and Maritime Conference in Hong Kong today. Sixteen of the 17 largest container liner companies currently belong to one of the four major alliances. (The exception is Hamburg Sud.)
GSF members include the National Industrial Transport League, the largest shipper group in the United States, which is holding its annual meeting this week in New Orleans.
The European Shippers’ Council (ESC) in April also said “There are growing concerns among manufacturers, retailers and wholesalers about the long term threats of a concentrated container liner shipping industry through alliances.”
ESC said it would undertake a global review of the container-shipping market, adding it “increasingly worries that [shippers] will have less choice in shipping their products overseas.”
ESC is a member of a rival organization formed in March called the Global Shippers’ Alliance. Its members include the Asian Shippers’ Association and the American Association of Exporters and Importers.
Raymond Mens, a spokesman for ESA, said the group’s investigation into container liner alliances is still ongoing and nothing has been published.
The Global Shippers Alliance, which met in Hong Kong this week, reached agreements on a joint position on trade facilitation and air freight and those documents will be ready later this week.
Welsh said GSF is not opposed to mega-alliances in principle, but they must deliver enhanced quality in services, as well as reduced prices.
Welsh spoke about challenges faced by the container industry, including depressed freight rates, the battle over ship cargo capacities and shipping alliances.
“The industry is going through the mill – some of this is self-inflicted but it has been affected by the dramatic slowing of the economy in China. Carriers have responded by forming alliances but bigger ships have impacts on the supply chain such as delays and longer lead times, in particular undermining ‘just in time’ delivery concepts.
And all of this has been done without dialogue with customers,” he said.
GSF said “better communication across the whole supply chain is vital to ensure customers’ needs are not compromised by the container-shipping industry’s drive to cut costs through mega-alliances.”
GSF said it will publish a report by the end of November “that will review the situation from an economic and legal perspective and will make recommendations on the findings to facilitate a much needed debate by all maritime supply chain stakeholders.”
Global Shippers’ Forum questions benefits of carrier alliances to shippers
