Four lines pulling out of India alliance

Four of Asia’s biggest shipping lines will end their Indian sub- continent-Europe trade alliance less than a year after they initiated the ground-breaking service, according to a report in the South China Morning Post.

The daily newspaper reported yesterday that the China Ocean Shipping Co (Cosco), Evergreen Marine, Malaysia International Shipping Corp (Misc) and Japan’s K Line will dissolve the alliance by the end of the year.

The break-up is being led by Cosco and will remove more than 100,000 teu (20 ft equivalent units) of annualised capacity from the trade, a reduction of 35 per cent to 40 per cent, according to the Morning Post.

The service was started in February with Egypt’s Port Said used as a transshipment hub for Asia-linked cargo, in line with K Line’s strategy of calling at Suez ports to link with its Asia-Europe volumes.

After the alliance’s last sailing in the middle of next month, Evergreen, Misc and K Line will join with Taiwan’s Yang Ming Marine, the Shipping Corp of India (SCI) and Zim Israel to jointly offer a seven-ship service deploying vessels of 2,400 teu capacity on the route. South Korea’s Hanjin and Senator Lines will continue to share slots with the new group.

SCI will deploy two vessels on the route, with the other lines using one ship each.

China’s national carrier will explore other ways of serving the westbound Indian sub-continent-Europe market, possibly by moving cargo from the sub-continent to Singapore and transshipping it on one of its Asia-Europe services to Europe. Transshipment times would suffer by several days, but Singapore would recover the transshipment business it lost last year when the direct service was launched.

Meanwhile, industry sources said the new India trade alliance could lay the groundwork for Evergreen and Zim Israel to join Cosco, K Line, Yang Ming, Hanjin and Senator on a more permanent basis. If this happened, it would launch the world’s largest carrier alliance.
Zim Israel recently withdrew from a vessel-sharing agreement with the China Shipping Group on the east-west trades, opting for slot deals with Cosco in the interim.

Taiwan’s Evergreen wants to change its global strategy from round- the-world services to end-to-end strings deploying an expanded number of ships. Joining a new alliance could be one way to achieve that aim.