What are Ocean Alliances?
Ocean alliances are collaborative agreements between major container shipping lines. These agreements allow member lines to share vessels, port calls, and even entire trade routes. The primary objective behind forming these alliances is to achieve economies of scale, optimize capacity, and enhance service offerings, all while reducing operational costs.
The Major Ocean Alliances
There are three major ocean alliances that dominate the maritime shipping industry:
The 2M Alliance
Members: Maersk Line and Mediterranean Shipping Company (MSC).
The 2M Alliance controls a significant portion of the global container shipping market. With a combined fleet of hundreds of vessels, this alliance primarily operates in the East-West trades, covering Asia-Europe, Asia-North America, and transatlantic routes.
In 2023, Maersk and MSC announced their decision to quit the 2M alliance by 2025. This decision came after the alliance had been in place for a minimum term of 10 years, with a stipulated 2-year notice period for termination. The dissolution of the 2M alliance is bound to have ripple effects across the shipping sector. Together, Maersk and MSC command about one-third of the global container capacity.
The Ocean Alliance
Members: COSCO Shipping, Evergreen Line, CMA CGM, and OOCL.
Launched in 2017, the Ocean Alliance is one of the largest operational agreements ever made between shipping companies. With a vast network, it offers 40 maritime services and covers over 100 ports worldwide.
THE Alliance
Members: Hapag-Lloyd, Yang Ming, ONE (Ocean Network Express), and HMM.
THE Alliance provides a broad range of services across major trade routes. It focuses on offering competitive transit times and expanding its port coverage to meet the demands of its clientele. Founded in 2017, THE Alliance boasts 3.5 million TEUs, making up about 25% of global container capacity. By April 2020, with South Korea’s HMM joining, their capacity grew by 519,000 TEUs, raising their market share to 30%.
