If you live and die with annual ocean contracting circus, it is coming around again. Now, right now is the time to consider changing and seriously planning your buying program.
At the start of 2025, the global alliances are changing greatly, from three alliances into four new arrangements.
· MSC is on their own and is plenty big now to control their future.
· Maersk has a new partner in Hapag Lloyd under a new alliance banner called Gemini.
· The Ocean Alliance remains intact with COSCO, sister carrier OOCL, Evergreen and CMA-CGM.
· The Alliance is losing big partner Hapag Lloyd to Gemini and seems the remaining players ONE, Yang Ming, HMM are recreated to newly named Premier Alliance and seems this alliance will focus on the Transpacific trade.
Other updates include MSC is said to have an agreement with ZIM on sharing some Transpacific East Coast vessels while they have struck another deal with ONE on sharing some services from Asia to Europe.
Should you invest in better procurement programs for your ocean business? Now is a good time to consider the situation. Many companies do and focus people and resources in negotiating and building strong relationships with their carrier & NVOCC partners. Negotiating aggressively but still working to keep strong relationships with their best partners.
Here is another reason to building up your capabilities and strategies in the Ocean Transportation business. The industry has been consolidating these last 20 years! The big players are much bigger. Their control over the long distance tradelanes have grown. The last big trade that has plenty of competition is really Intra-Asia. Asia to Europe and Med; the Transpacific with US & Canada, the Asia/Latin America – the big carriers control the volumes and capacities.
Back in 2000, the top 10 carriers controlled about half of the of all the global container market that had about 100 competitors. Ever since the number of carriers big and small have squeezed down smaller and smaller. The latest count is about 40 carriers total serving signel trades or multiple or global. The top 10 have about 83% of the total TEU market. All of it. The smaller 30 carriers are in the short distance trade lanes mostly, like Intra Asia or Asia/ME. The tide has turned from decades of many barely making a profit and suffering from the hard negotiations of stingy customers. Now you should expect continuing record profits from carriers who have the bulk of the services, capacity, vessels and control.
Oh, and the top 4 carriers? MSC, Maersk, CMA-CGM, and Cosco? They control two-thirds of the volumes just in the top 10 group! Watch them closely. Where they go, the others will follow or lose.