Page 2 - Al-Rashed Newsletter June 19

SHIPPING WORLD
'AN END TO SHIPPING ALLIANCES

WOULD SEE FREIGHT RATES

SKYROCKET'

Shipper opposition to the operation of deep sea liner shipping alliances
may be dangerously misplaced.

Lars Jensen, chief executive and partner of SeaIntelligence Consulting,
said that efforts by some to bar container lines from operating in alliances,
claiming that they have become anti-competitive – such as the International
Transport Forum’s report earlier this year – would result in freight rates
“skyrocketing”.

The EU’s Block Exemption Regulation (BER), which is the de facto
legislation covering liner alliances and vessel sharing agreements (VSAs)
on container trades to and from Europe, is set to expire on April 25, 2020,
and European Commission regulators are currently assessing whether to
extend it for a further five years.

If shipping alliances are outlawed altogether then freight rates will skyrocket
because alliances are the only way that carriers can operate ultra-large
container ships (ULCVs) effectively.

He explained that on its own Maersk Line could only run two Asia-Europe
services a week with its fleet, and even then it would have a much more
limited port rotation than currently under its 2M alliance with MSC. Maersk
Line would see these services calling at just three Chinese export ports and
making three main European port calls. And MSC is in the same situation.

Mr. Jensen further adds: Now, if you are shipping from Shanghai container
yard to Rotterdam container yard then that’s fine, rates will stay relatively
low, but for any other origin or destination you will have to use far more
transhipment than currently used and shippers will be faced with an
enormous jump in freight rates. So I am of the opinion that shippers should
pray that lines are allowed to continue to operate alliances.

D I D Y O U

K N O W ?

U n l e s s f o o d i s
m i x e d w i t h
s a l i v a y o u c a n ' t
t a s t e i t .

Source: https://container-mag.com/