Are we coming to the end of the period of container shipping alliances that cause so much concerns among shippers?

Supply Chain Digest Says...   “Maersk has invested so much money and effort to the integrator strategy that it is hard to see it backing down now,” Drewry notes.     What do you say?   Click here to send us your comments       Click here to see reader feedback

In 2015, Maersk Line and Mediterranean Shipping Co. (MSC) announced the new 2M alliance, in which the industry’s two largest carriers by capacity would collaborate on shipping, hauling each other’s containers while remaining independent in terms of sales, marketing and rates.

The thinking was that operating in this way would reduce costs.

That first agreement led to the creation of the Ocean Alliance and THE Alliance - similar consortiums of other carriers. The move led to concerns from regulators and shippers about price collusion, but the alliances were ultimately allowed to operate.

But now, in a somewhat surprising move, the 2M alliance is scheduled to end in 2025, according to the two carriers last week. 2025 would mark the end of the 10-year pact originally signed.

A joint statement from the two carriers noted that “MSC and Maersk recognize that much has changed since the two companies signed the 10-year agreement in 2015. Discontinuing the 2M alliance paves the way for both companies to continue to pursue their individual strategies.”

Now that container volumes are falling there is less reason to share capacity, industry executives said.

The maritime analysts at Drewry say that the collapse of 2M will leave Maersk in something of a tough spot.

“The Danish mega-carrier is too big to join an existing alliance and too small to go it alone,” Drewry says.

Maersk and MSC are clearly pursuing different strategies. MSC has been rapidly acquiring container capacity, while Maersk has focused on its vertical integration strategy and has not sought to defend its number one rank in terms of TEU.

However, “It would seem that MSC believes that it can better utilize these ships on its own, untethered by a partner with different priorities,” Drewry notes.

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As for Maersk, Drewry says “some of its clients have said that after contract talks, they think that the company is suffering from something of an identity crisis, unable to express what the integration strategy means in reality.”

Maersk is promoting end-to-end logistics capabilities, buying up 3PLs and warehouse companies as part of the vision.

“Maersk has invested so much money and effort to the integrator strategy that it is hard to see it backing down now,” Drewry notes.

Is this the start of the end of the alliances? Some in the industry have said yes.

Drewry’s take is that while a radical shake-up of the alliances is a remote possibility, it is certainly on the table. It says such an event could lead to carnage in the freight rates market as new members court shippers over to their new teams.

“The end of 2M throws up big questions for Maersk,” Drewry concludes.

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