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Maersk and Hapag-Lloyd on Wednesday unveiled a new operational partnership called “Gemini Cooperation” that will begin early next year and revolve around a global “hub-and-spoke” network of owned or controlled terminals in key locations.

Hapag-Lloyd will exit THE Alliance and link up with Maersk in February 2025 after the dissolution of the Maersk-Mediterranean Shipping Co. 2M Alliance. The Gemini Cooperation will operate a fleet of 290 vessels with an overall capacity of 3.4 million TEUs serving the major global trade lanes.

The cornerstone of the new partnership will be the hub-and-spoke network the carriers believe will enable them to achieve schedule reliability above 90%, a level that has not been achieved in years and would differentiate Gemini from other alliances.

“It is a realistic target,” Hapag-Lloyd CEO Rolf Habben Jansen told reporters during a press briefing. “When you have an efficient network at scale you can have a hub and spoke model, and to have control over the hubs and terminals is absolutely critical.”

The Gemini network will be structured around 12 terminal hubs owned or controlled by Maersk or Hapag-Lloyd in Asia, the Middle East, the Mediterranean, North Europe, and North and South America. It will cover seven global trades and offer 26 mainline services, with 32 dedicated regional shuttle services to and from the key hubs to ensure connections to many major ports.

The carriers will be part of the Gemini partnership for three years, after which a 12-month notice period will be required should either wish to withdraw. Maersk will provide 60% of the capacity and Hapag-Lloyd 40%, but Habben Jansen noted that both carriers would continue to operate other services outside the Gemini network using capacity not allocated to the new partnership.

Maersk is the world’s second-largest container shipping line by capacity with just over 4 million TEUs; Hapag-Lloyd is sixth at 1.8 million TEUs.

Streamlined port calls

Habben Jansen said he was confident the 90% on-time reliability would be achievable as the network would be more reliable and interconnected than traditional alliance setups, something the partners expect would improve the ability of services to cope with external disruptions.

“We will reach this [reliability] through a combination of streamlined port calls, controlled hubs and dedicated shuttle services,” he said. “All loops will have two to three main port calls per region so the risks of delays will be significantly less, and by controlling the hub terminals we can also control priority and waiting times. The shuttles will operate with a high frequency from hub terminals to final destinations.”

Gemini will release its preliminary ocean schedules in the third quarter, with the full operating schedules to be available in the fourth quarter.

Maersk said in a statement it would continue to work with its 2M partner MSC between now and the end of the 2M agreement in January 2025, “followed by a smooth transition to the new Gemini network.”

“We are pleased to enter this cooperation with Hapag-Lloyd, which is the ideal ocean partner on our strategic journey,” Maersk CEO Vincent Clerc said in a statement Wednesday.

“By entering this cooperation, we will be offering our customers a flexible ocean network that will be raising the bar for reliability in the industry,” Clerc added. “This will strengthen our integrated logistics offering and meet our customers’ needs.”

Habben Jansen emphasised that the cooperation with Maersk would not result in any change to the individual strategies deployed by the two carriers.

“Although we don’t have the same strategy — we are more a pure ocean player and they have an end-to-end focus — we have a shared goal around quality and sustainability that are two important parts of the cooperation we are setting up,” he told reporters, comparing the Gemini partnership to cooperation seen in the airline industry.

“Not all cooperations need to stop in five or 10 years,” Habben Jansen noted. “Look at the cooperation between Lufthansa and United, airlines that have been working together for decades. I do not see why something like that could not happen in shipping.”

Alliance reorientation

Hapag-Lloyd has been part of THE Alliance since 2017 along with Ocean Network Express (ONE), Yang Ming and HMM; its exit will withdraw 25% of the alliance’s capacity. While Hapag-Lloyd had planned to remain a member of THE Alliance until 2030, Habben Jansen said the partnership with Maersk better served its goals.

“This is not a decision against THE Alliance, which has been a long-standing, trusted and successful partnership for us,” he said. “It is a next step to build something new that we believe will enable us to generate even more value for our customers by pairing our Hapag-Lloyd customer service with much higher operational quality in a robust and resilient network.”

But Habben Jansen noted that without Hapag-Lloyd, one of THE Alliance’s largest members, the three remaining carriers would need to “reorient themselves.”

That’s a view shared by Lars Jensen, CEO of Vespucci Maritime and a Journal of Commerce analyst.

“This leaves ONE, Yang Ming and HMM in a very vulnerable position, unable to field a network matching those of Ocean Alliance, MSC and Gemini,” Jensen wrote in a LinkedIn post. “The pressure is then on these three carriers to either lure a new partner out from Ocean Alliance or re-invent a new service concept.”

Source:

Knowler, G. (2024, January 17). Maersk, Hapag-Lloyd Launch New “gemini cooperation” partnership. Journal of Commerce. https://www.joc.com/article/maersk-hapag-lloyd-launch-new-gemini-cooperation-partnership_20240117.html

Maersk plans to eliminate Panama Canal vessel transits on a north-south service between Oceania and the US East Coast, citing the ongoing drought that has reduced ship transits and container carrying capacity through the waterway.

The Copenhagen-based carrier said Wednesday that its OC1 service linking Australia and New Zealand with the ports of Philadelphia and Charleston will instead use a 50-mile rail service across the Isthmus of Panama to handle cargo between the Atlantic and Pacific.

As a result, the OC1 service will be broken into two loops, Maersk said. The Pacific loop will drop off northbound cargo at Balboa for the land bridge service via rail to Manzanillo, where the Atlantic loop will retrieve the cargo and resume waterborne service.

The carrier did not say whether the nearly 26-day transit time from New Zealand to Philadelphia would change due to the land bridge. It said that while northbound cargo will not be delayed, southbound cargo may see some delays.

Other Maersk services from Asia to the US East Coast will continue to use the Panama Canal.

Along with the Panama Canal, Maersk said the OC1 would omit Cartagena, Colombia, as a call. It also directed shippers to the option of its PANZ service between Oceania and the US West Coast.

Maersk said the decision to omit the Panama Canal crossing on OC1 was “based on current and projected water levels in Gatun Lake,” which provides the water to raise and lower vessels in the canal’s locks. As of Wednesday, the Panama Canal Authority (ACP) said Gatun Lake was at 81.6 feet, compared with a five-year average water level for January of 86.9 feet.

Low water levels have forced the ACP to only allow 24 ships of any size to transit the canal daily, down from the 35 to 40 ships it could handle before the ongoing drought that has reduced Gatun’s water levels. Ships must also carry less cargo as the canal is limiting the maximum depth of neo-Panamax vessels to 44 feet from 50 feet. Smaller Panamax vessels, such as the ones in the OC1 service, are restricted to a 39.5-foot depth versus the typical 45 feet.

In early December, ocean carriers in THE Alliance said they were preparing to divert east-west vessel services from the Panama Canal due to the potential for transits being reduced to as few as 18 by February. But with better-than-projected water levels on Gatun Lake, the ACP did not implement that further reduction.

Source:

Angell, M. (2024a, January 10). Maersk opts for rail crossing on a north-south service to bypass Panama Canal. Journal of Commerce. https://www.joc.com/article/maersk-opts-rail-crossing-north-south-service-bypass-panama-canal_20240110.html

Maersk on Sunday said it would pause any further transits through the Red Sea for at least 48 hours after one of its container ships was attacked twice within 24 hours by Houthi rebels who do not appear deterred by the presence of a multinational naval force meant to restore security in the region.

The second attack against the Maersk Hangzhou this weekend represented an escalation in hostilities as Houthis used small boats to get within 65 feet of the 14,000-TEU vessel in an attempt to board the ship, which Maersk said was not damaged by missiles fired by the attackers. Until Sunday, the Iran-backed Houthis have attacked ships by firing missiles and launching drones from southern Yemen.

“Maersk can … confirm that after the initial attack on the vessel, four boats approached the vessel and engaged fire in an expected attempt to board the vessel,” the carrier said in a statement Sunday. “A helicopter was deployed from a nearby navy vessel, and in collaboration with the vessel’s security team, the boarding attempt was successfully repelled.

“In light of the incident — and to allow time to investigate the details of the incident and assess the security situation further — it has been decided to delay all transits through the area until 2nd January,” Maersk added.

Maersk said the vessel, bound for Port Suez after initially departing Singapore, was continuing its sailing northbound.

Responding to the 23rd attack on a commercial ship since Nov. 19, US Navy helicopters sank three of the four small vessels involved, killing the crews, the US Central Command said Sunday.

The attacks against the Maersk Hangzhou came one week after the carrier, responding to the creation of the naval task force, said it would resume some sailings through the Red Sea and Suez Canal once operationally possible. But Maersk warned in its Dec. 24 announcement that its resumption of Suez transits could change if the security situation deteriorated further.

Naval escorts not a sufficient deterrent yet

It was not immediately known what effect the Maersk attacks would have on other carriers, namely Cosco and CMA CGM, that had also been sending some of their ships through the Suez. At first blush, it is likely to send even more capacity diverting around the Cape of Good Hope in southern Africa.

At the very least for ocean carriers, it means that a protection regime has not materialized that guarantees freedom of navigation through the Bab al-Mandab strait and eliminates or significantly reduces the risk of attack in the area. No organized system of naval escorts or convoys has come into existence, nor have land-based threats been eliminated or seriously confronted. Rather, senior ocean carrier executives tell the Journal of Commerce, the Operational Prosperity Guardian coalition is relying on deterrence created by its physical presence and its ability — for the most part successfully thus far — to intercept air-based weapons to keep the Suez route open to at least some shipping traffic.

But it’s clearly not enough, illustrating the difficulties the US is facing in balancing its desires to protect freedom of navigation while seeking to avoid escalating the Israeli-Hamas war into a full-blown regional conflict. As long as broader US goals conflict with those of protecting shipping and an effective protective regime fails to materialize, ships will continue to be diverted around the much longer Cape of Good Hope route, disrupting supply chains.

Geopolitical analysts warn that the patrols can help shield vessels, but the Houthi rebels are well-placed to keep up attacks via relatively cheap drones and missile attacks from the shore of southern Yemen. S&P analysts and container lines carriers tell the Journal of Commerce that earlier suspicions that rebels were targeting vessels tied to Israel were incorrect, putting any ships — regardless of shipowner — in danger.

“If the Houthis keep up the pace of attacks and have a steady supply of drones and missiles [which seems likely], the cost of maintaining a naval escort operation — including the costs of operating the ships at distance — will rapidly rise into the tens of billions of dollars,” Bruce Jones, a geopolitical analyst and TPM23 speaker, wrote in Foreign Policy.

Detail please refer to JOC News.

Source:

Szakonyi, M. (2023, December 31). Maersk Pauses Red Sea routings after new attacks. Journal of Commerce. https://www.joc.com/article/maersk-pauses-red-sea-routings-after-new-attacks_20231231.html

Shippers in Asia and Brazil are suffering from cargo delays of up to a month as ocean carriers omit calls at key transshipment ports in Central and South America to offset delays caused by limits on the number of ship transits through the drought-hit Panama Canal.

Port and freight forwarding executives say the omissions mainly affect carriers in THE Alliance.

Highlighting the delays, Fabrizio De Paulis, managing director of Brazilian forwarder De Paulis Logistics & SCM Eireli, said two consignments of reefer containers were delayed at Cartagena, Colombia, for almost two weeks because of port omissions and congestion.

Ocean Network Express (ONE) and Hapag-Lloyd confirmed they are skipping calls, especially at Cartagena and Manzanillo in Panama, although omissions are being made at other ports.

ONE said at least 12 December and January sailings on the Asia-US East Coast EC1 and EC2 services, operated as part of THE Alliance network, would skip calls at either Manzanillo or Cartagena as vessels were diverted.

Vessels operating those services, including the 13,000-TEU Ulsan Express and 13,296-TEU Al Riffa were originally to be diverted through the Suez Canal, ONE said. But due to the threat of missile and drone attacks in the Red Sea, ships are now sailing via the Cape of Good Hope.

The extra transit time has lengthened the original delay of about 10 days for arrival on the US East Coast to about one month, vessel schedules showed Tuesday.

By comparison, the latest data from the Panama Canal Authority (ACP) shows 47 vessels with transit bookings and 23 vessels without were waiting in the queue Tuesday. The average waiting time for non-booked neo-Panamax vessels was under five days for north and southbound vessels, ACP data showed.

ONE said it was also transshipping cargo in South Korea’s Busan after it changed vessel routings from eastbound to westbound to avoid the Panama Canal.

Hapag-Lloyd said it is omitting calls at ports including Kaohsiung, Taiwan and Buenaventura in Colombia on its Asia-Latin America (JCS) and North Europe-South America Westcoast (SWX) services.

“The omissions were made because we didn’t get slots to go through the canal,” a Hapag-Lloyd spokesperson told the Journal of Commerce. “The slot situation is challenging at the moment, but we see some light at the end of the tunnel. The EC2 service will pass via the canal in January again.”

Maersk said it has not made any port omissions despite the restrictions through the Panama Canal.

“We have been closely monitoring the situation and, thus far, we have been able to continue making and securing timely Panama Canal transits to support our customers,” Maersk Latin America spokesperson Monica Martinez told the Journal of Commerce. “We continue to adapt our internal processes to match the updated booking requirements of the canal, securing access to the transit slots needed to ensure minimum impact on our customers.”

Panama is continuing to suffer from a prolonged drought in what is supposed to be the height of the country’s rainy season, which generally lasts between May and November. While transit restrictions have been implemented during periods of low rainfall since at least 2016, the drought has been especially severe this year due to the simultaneous warming of both the Pacific and Atlantic oceans, which has reduced rainfall.

The number of ship transits through the canal, reduced to 32 during the northern hemisphere summer, was cut again to 31 from Nov. 1. Under normal circumstances, about 40 transits per day would take place.

Fewer vessel calls for Panama’s MIT

Details please refer to JOC news.

Source:

Wallis, K. (2023b, December 27). Shippers face delays as carriers skip South America calls due to Panama Canal woes. Journal of Commerce. https://www.joc.com/article/shippers-face-delays-carriers-skip-south-america-calls-due-panama-canal-woes_20231227.html

A Mediterranean Shipping Co. (MSC) container ship on Tuesday became the latest commercial vessel attacked in the Red Sea, just days after its 2M Alliance partner Maersk said it would consider resuming transits through the Red Sea and Suez Canal due to the creation of an international naval task force meant to protect shipping in the region.

MSC said in a statement that the MSC United VIII was attacked in the early afternoon local time while it was en route from Saudi Arabia’s King Abdullah Port to Karachi, Pakistan. The ship is not on a regular service but listed as an “extra vessel” on MSC’s online schedule.

“The vessel informed a nearby coalition task force warship of the attack and as instructed engaged in evasive maneuvers,” MSC said in the statement. “Currently, all crew are safe with no reported injuries and a thorough assessment of the vessel is being conducted.

“Our first priority remains protecting the lives and safety of our seafarers, and until their safety can be ensured MSC will continue to reroute vessels booked for Suez transit via the Cape of Good Hope,” the carrier added. It did not disclose the exact nature of the attack.

The diversions are being driven by accelerating attacks against commercial shipping in the form of missiles and drones launched by Houthi rebels from southern Yemen, an extension of the Israel-Hamas war in Gaza. The US last week announced the creation of a multinational naval force to thwart the attacks and restore security to the Red Sea and Gulf of Aden.

Tuesday’s attack was the third against a container ship. On Dec. 14, the Maersk Gibraltar had a “near-miss” incident, according to Maersk, while Hapag-Lloyd’s Al Jasrah was attacked the following day. Neither incident resulted in any casualties, and the ships were able to resume their transit.

Separately, the US Central Command reported that a US Navy destroyer and fighter jets on Tuesday shot down 12 attack drones, three anti-ship ballistic missiles and two cruise missiles the Houthis launched from Yemen.

Maersk said Friday while the presence of the naval force is “most welcome news” for commercial shipping, “the overall risk in the area is not eliminated at this stage.”

Source:

Angell, M. (2023, December 26). MSC ship becomes latest targeted in Red Sea Attack. Journal of Commerce. https://www.joc.com/article/msc-ship-becomes-latest-targeted-red-sea-attack_20231226.html