Ocean carrier mega-alliances called into question

The Global Shippers’ Forum (GSF) says better communication across the whole supply chain is vital to ensure shipper’s needs are not compromised by the container shipping industry’s drive to cut costs through mega-alliances.

Speaking at the Asian Logistics and Maritime Conference (ALMC) in Hong Kong this week, GSF Secretary-General Chris Welsh told delegates that GSF is not opposed to mega-alliances “in principle” but they must deliver enhanced quality in services as well as reduced prices.

“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 container ship industry as a whole would be better served by fewer lines competing head-on,” he says.

Welsh was addressing the conference on the 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 says.

The GSF, which has 23 fee-paying and five associate members worldwide, is preparing a report to be published by the end of the month 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.