Opinion piece: the impact of the new alliances

8 March 2017

By: our colleague, Albert

Since April, the new alliances are all operational and we are now looking at 3 allies: OCEAN Alliance, THE Alliance and 2M. A lot has already been written about it and everyone has an opinion, but what are the really major changes?

Effect of alliances on planning and purchasing

The impact of the new alliances will not go un-noticed and indeed there are already implications. Having less choices to ship more cargo has changed not only the price policy of the shipping companies, but also planning for each shipper. Strategic planning and purchasing becomes an even more important part of logistics. There are now in fact just three parties that share the capacity and sailings. Bearing in mind the recent capacity problems from the Far East, it makes sense to start thinking about which alliance should carry your sea freight.

Shipping companies working together to save on costs

Acquisitions and bankruptcies over the past while have meant that cost savings are a necessity for shipping companies. One way to save costs is to work together in large alliances. The losses of all large shipping companies are historic, as is the reduction in capacity. In early 2016 there were 4 alliances with 16 providers in total, from April we have to make do with 3 alliances and 12 providers.

Fluctuations in ocean freight rates

Meanwhile, it seems that major rate fluctuations are now behind us, not only by mutual agreement, but simply because no company can afford this anymore. So to conclude on a positive note, some stability seems to be coming to ocean freight rates, even from the Far East …