May 23, 2017

New Shipping Alliances Set Sail: What You Need to Know

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May

23

New Shipping Alliances Set Sail: What You Need to Know

Posted by: Lisa Reid, International Client Services Director

Last month, the ocean freight industry’s major shipping companies officially reorganised into three alliances – Ocean Alliance, THE Alliance, and 2M. Combined, these three alliances are estimated to represent over 77% of global container capacity and may impact organisations’ relocation programmes and international assignees’ relocation experiences.

The New Shipping Alliances

The purpose of the new shipping alliances is to strengthen their financial stability, create efficiencies, and provide a better service to customers. The alliances are as follows:

  • 2M Alliance: Maersk, MSC
  • THE Alliance: NYK, MOL, K Line, Yang Ming, Hapag-Lloyd (with UASC)
  • Ocean Alliance: CMA CGM, Evergreen, OOCL, COSCO Shipping

Ocean Alliance offers the most services (40 loops), followed by THE Alliance (32 loops), and 2M (25 loops). Each alliance has announced new service offerings, with THE Alliance and Ocean Alliance now running 11 weekly Asia-Northern Europe routes, whilst 2M has increased its services on this route from five to six. With regards to the Asia-U.S. West Coast routes, Ocean Alliance offers 13 services, THE Alliance has 11, and 2M has five.

Currently, we do not yet have all the information regarding these three new alliances. The Ocean Alliance, for example, has not released actual schedules or the specific vessels that will form part of its services. THE Alliance has also yet to release full operational details.

What this Means to Your Relocation Programme Going Forward

Potential delays. These new alliances are expected to have an impact on ports, especially during the first few months of implementation. The current lack of information and clarity means that the new alliances have the potential to disrupt all parties in the supply chain. Organisations should factor possible delays into their relocation schedules, and assignees should be made aware that the arrival of their household goods (HHG) shipments may be delayed.

Increased transit times and cost. There is also the possibility of increasing costs and transit times. We will continue to work closely with our network of freight forwarders to prioritise Cartus shipments. Indeed, users of our eProcurement tool will already be familiar with our competitive HHG shipment costs.

Work closely with providers. We recommend working closely with your relocation services provider and approved freight forwarder who will advise of the very latest information during this period of implementation.

Avoid rushed moves. It is important to plan international assignments well in advance to avoid last-minute relocations. With potential delays already expected, rushed moves could be quite challenging to complete on time.

Other considerations. Temporary accommodation may have to be arranged, or extended, if an assignee’s household goods are delayed. Alternatively, organisations may want to consider providing furniture rental for those that are waiting a long time for household goods to arrive. Organisations should consider the possible extra cost of extended periods in temporary accommodation or furniture rental when budgeting for future international assignments.

We will continue to monitor the impact that these new shipping alliances may have on your relocation programme and international assignees, keeping you up to date with any new developments. Please contact your Cartus representative if you have any questions, or email us at trustedguidance@cartus.com.

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Posted By

Lisa Reid

About Lisa

Lisa is International Client Services Director and responsible for managing clients’ relocation policies and objectives. Based in our Swindon office, she has more than 15 years of experience in the global corporate relocation industry.

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