Major Changes in Asia-North Europe Shipping: Hapag-Lloyd and Maersk Shake Up Port Alliances
Carriers are preparing for changes in liner alliances next year, particularly on the Asia-North Europe trade route. Recently, Maersk and Hapag-Lloyd chose London Gateway as their UK port over Felixstowe. This decision leaves MSC as the largest carrier operating at Felixstowe, although the Ocean Alliance maintains two calls at this port.
A local forwarder remarked, “Felixstowe will suffer, obviously, increasing the importance of MSC. Ocean Alliance will still have regular calls on multiple services, but it’s a significant loss for the UK’s largest port.”
In another development, Hapag-Lloyd is changing its China-Germany Express (CGX) service starting January. Two new stops will be added in China at Shanghai and Ningbo, while Antwerp will be removed. The service will now include Rotterdam and Southampton, with the following rotation: Yangshan, Ningbo, Yantian, Singapore, Tema, Southampton, Rotterdam, and Wilhelmshaven.
Hapag-Lloyd will launch this updated service with the 6,500 TEU vessel, Copiapo, departing from Shanghai on January 3. The fleet for this service consists of 12 vessels, each averaging 4,200 TEU capacity.
How will changes in liner alliances impact freight rates and service reliability for shippers in the Asia-North Europe trade route?
Interview with Logistics Specialist on Changes in Liner Alliances and Port Operations
Interviewer: Today, we have the pleasure of speaking with Dr. Emma Richards, an expert in maritime logistics and supply chain management. Dr. Richards, thank you for joining us to discuss the recent developments in liner alliances and their implications for UK ports, particularly Felixstowe and the Asia-North Europe trade route.
Q: Dr. Richards, can you shed some light on the recent decision by Maersk and Hapag-Lloyd to select London Gateway over Felixstowe as their UK port? What impacts do you foresee from this shift?
Dr. Richards: This decision is quite significant. London Gateway’s capabilities and strategic location may offer better operational efficiencies for these carriers. As a result, Felixstowe, which has historically been a major hub, will undoubtedly feel the repercussions. With MSC now being the largest carrier at Felixstowe, the port’s competitive edge diminishes. This consolidation of capacity at London Gateway could lead to an increased focus on service offerings there, ultimately affecting freight rates and schedules at Felixstowe, which could struggle to maintain its volume.
Q: You mentioned that MSC remains a significant player at Felixstowe. What role does it play in the broader context of liner alliances, especially with the Ocean Alliance making calls there?
Dr. Richards: MSC’s prominence at Felixstowe is important, especially now that they are the sole large carrier in that location post-decision. Although Ocean Alliance has two regular calls, the overall reduction in competition may create a scenario where MSC could dictate terms and rates more favorably for itself. While Ocean Alliance maintains presence, the loss of prominent carriers like Maersk and Hapag-Lloyd will likely lead to constrained capacity and potentially higher costs for shippers in that region.
Q: Switching gears, let’s talk about Hapag-Lloyd’s changes to the CGX service. Adding Shanghai and Ningbo while removing Antwerp seems like a strategic shift. What do you think is driving this decision?
Dr. Richards: Hapag-Lloyd appears to be responding to the evolving trade dynamics between Asia and Europe. By adding major Chinese ports like Shanghai and Ningbo, they are likely looking to tap into increasing cargo volumes from Asia. Antwerp’s removal could be a response to operational challenges or a reflection of demand shifts. The updated rotation, including Southampton and Rotterdam, may align better with their strategic goals, improving connectivity for their clientele in Germany and beyond.
Q: Ending the slot charter agreement with the Ocean Alliance for the NEU5 service marks an important transition. What implications does this have for Hapag-Lloyd and the shippers relying on that service?
Dr. Richards: Ending that agreement will signal a shift in Hapag-Lloyd’s operational strategy, as they will be taking complete control over the service without relying on the Ocean Alliance’s network. This could either enhance service reliability for shippers or, alternatively, introduce some uncertainty as they adapt to solely scheduling and operating their vessels. The last sailing of the CMA CGM Rivoli reflects the urgency for shippers to adjust quickly, as changes in service can affect supply chains significantly.
Q: how do you see these developments influencing the future landscape of liner shipping and ports in the UK?
Dr. Richards: The competitive landscape is certainly evolving. With key players realigning their services, we might see an increased concentration of trade routes in specific ports, impacting overall logistics networks in the UK. Port authorities may need to innovate and diversify to attract carriers and maintain cargo volumes. The implications also extend to freight rates, service reliability, and the strategic choices that shippers make based on the available options. it will be pivotal for ports like Felixstowe to adapt quickly to stay competitive.
Interviewer: Thank you, Dr. Richards, for your insights on these significant changes in the liner alliances and their impact on the shipping landscape. Your expertise sheds light on a crucial issue affecting global trade.
Additionally, Hapag-Lloyd will end its slot charter agreement with the Ocean Alliance on the NEU5 Asia-North Europe service at year-end. This agreement began in early 2023 to maintain service levels during the pandemic.
The last sailing of the NEU5 service will be the CMA CGM Rivoli, a 23,100 TEU vessel, departing from Qingdao on December 30.