China COSCO Shipping Corp (COSCOCS) and CMA CGM intend to involve Evergreen and Orient Overseas Container Line (OOCL) as well as Islamic Republic of Iran Shipping Lines (IRISL) in their new alliance, CCEO, Chinese shipping sources have told IHS Fairplay. CMA CGM has strongly denied that it was seeing a new alliance with the carriers.
According to sources with ties to COSCOCS, CMA CGM is leading the talks with IRISL.
In January, CMA CGM and IRISL unveiled plans to work on sharing vessel capacity and jointly operating routes.
The sources also told IHS Fairplay that IRISL may take the place of United Arab Shipping Co. in the alliance.
Officials from China’s National Development and Reform Commission (NDRC) and CMA CGM have both confirmed discussions are under way for the formation of a new alliance.
“COSCOCS is dedicated to form[ing] a strong and competitive alliance,” a senior official from the group said at the press conference for its foundation. “Before any new alliance is formed, COSCOCS will maintain the orginal operation in two alliances (CKYHE and O3) so as to ensure stable service.”
According to Wang Hai, an expert from shipping watchdog www.ship.sh, once the new alliance is set up, it will control around 3 million teu in east-west trade, which will surpass the capacity of 2M and become the ever largest shipping alliance.
The O3 agreement is to expire in the end of 2016, and the CKYHE agreement will expire at the beginning of 2017. “It is reasonable for the two companies to start discussion of a new alliance in advance,” said Wang, “and it is COSCOCS’s best option to form a new alliance after its establishment for around a year.”
“It is quite natural for the third largest carrier (CMA CGM) and the fourth largest to set up an alliance, since the number one and number two carriers have formed the 2M alliance,” Wang added, who projected the CCEO alliance could be formed at the beginning of 2017 at the soonest.
The new alliance may reshape global container shipping and bring great challenges to 2M’s dominance in China-Euro trade, said Wang. “If the CCEO alliance is founded, the G6 will lose the capacity of OOCL, and United Arab Shipping will be isolated from O3. The reshape of global container shipping shall be a go.”
The O3 alliance composes the old China Shipping, CMA CGM, United Arab Shipping, and CKYHE is made up of the previous COSCO, Kawasaki Kisen Kaisha, Yang Ming Marine Transport, Hanjin Shipping and Evergreen Line, while the G6 group involves OOCL, American President Lines, Hapag-Lloyd, Hyundai Merchant Marine, Mitsui OSK Lines and Nippon Yusen Kabushiki Kaisha.
Source: IHS Fairplay
Source: IHS Fairplay