The proposed liner consortium of five ocean carriers called “THE Alliance” becomes effective on December 19, 2016 after it recently received the green light from U.S. regulatory body Federal Maritime Commission (FMC).
The commission voted to allow the vessel-sharing agreement (VSA) to operate on American waters following “a period of substantive and constructive discussion with the parties,” an official statement from the agency said.
Attorneys acting on behalf of THE Alliance submitted the application to establish the agreement on November 4, 2016. The commission made no request for additional information, clearing the way for the agreement to come into force within the initial 45-day review period.
“I am very cognizant of the concerns industry stakeholders had regarding provisions in this agreement, particularly those related to information sharing and joint procurement,” stated FMC Chairman Mario Cordero. “This office will continue to carefully focus on the impacts of the carrier alliance restructuring that is taking place in the shipping industry.”
THE Alliance, announced in May, is comprised of five different container shipping companies—Hapag-Lloyd of Germany; Taiwan’s Yang Ming; and Japanese carriers Kawasaki Kisen Kaisha, Mitsui O.S.K. Lines, and Nippon Yusen Kaisha. The Japanese liners announced just last month plans to combine their carrier divisions to strengthen their operations.
The FMC said the agreement applies only to trade lanes between the United States and other nations: “Cargo moved by carriers in THE Alliance that does not originate or terminate in the United States is not covered by this agreement.”
Under the accord, THE Alliance members are permitted to share vessels, charter and exchange space on each other’s ships, and enter into cooperative working arrangements.
With the approval of The Alliance, the third group of container lines petitioning for a major VSA, the stage is set for a three-way battle between it and the two other mega alliances—Ocean Alliance and 2M—in April next year.
The Ocean Alliance is composed of CMA CGM, Cosco Shipping, Evergreen Line, and Orient Overseas Container Line, while the 2M Alliance consists of Mediterranean Shipping Co. and Maersk Line. 2M has just entered into a limited partnership with Hyundai Merchant Marine that involves slot exchanges and slot purchases with the South Korean liner company.
THE Alliance will be operating 151 ships with capacities ranging from 3,000 twenty-foot-equivalent units to 14,500 TEUs.
Photo: Urban Explorer Hamburg from Ottensen, Deutschland – Elbstrand Hamburg
