Hapag-Lloyd, Maersk alliance to bring changes for HMM

[Photo by Yonhap]

Hapag-Lloyd AG, the fifth-largest shipping company globally, is set to exit its current shipping alliance and partner with the world’s second-largest shipper, Maersk A/S, inevitably impacting remaining members in the alliance, including South Korean carrier HMM Co.

According to industry sources and foreign media reports published on Thursday, Hapag-Lloyd will join Maersk in the new “Gemini Cooperation,” launching in February 2025. Out of a total combined container capacity of 6.13 million twenty-foot equivalent units (TEUs), 55 percent, or 3.4 million TEUs (corresponding to around 290 ships), will be allocated to the new alliance.

Hapag-Lloyd will exit its current alliance at the end of January 2025. Given that the German carrier holds the highest container capacity with 1,975,485 TEUs, or 37 percent in the alliance, Hapag-Lloyd’s withdrawal is expected to have a profound impact on the remaining members, including the world’s sixth-largest carrier, Japan’s Ocean Network Express Pte (ONE), HMM (eight), and Taiwan’s Yang Ming Marine Transport Corp. of Taiwan (ninth).

Shipping alliances jointly use ships, containers, and terminals, as well as adjusting routes to cooperate on operation. Relatively smaller shippers with lower container capacity benefit from this cooperative use of ships, containers, and terminals on top of the broad transport range and cost-saving effects that these alliances offer.

“The larger the size of the shipping alliance, the better the quality of service and the potential for cost savings in investments in ships or terminals. With Hapag-Lloyd’s withdrawal, the competitiveness of The Alliance will inevitably diminish,” Ko Byoung-wook of the Korea Maritime Institute said.

Meanwhile, the launch of the Gemini Cooperation signals a reshaping of global shipping alliances, ahead of the dissolution of the 2M alliance between the world’s largest Mediterranean Shipping Company S.A. (MSC) and Maersk, scheduled for January 2025.