4. Alliances: Choosing the right service provider just got more complicated
Summary:
- Major changes in Alliances in 2025 will bring risk and opportunity
- Best carrier network will vary tremendously from trade to trade
- OCEAN Alliance has most capacity and service loops in 2025
- Gemini may be go-to carrier to avoid Singapore congestion
- Carriers may stop calling at some ports in 2025
- Seek assurances that carriers can deliver what they promise
As of 1 February 2025, there will be three main alliances operating on the world’s six major fronthaul trades found on Transatlantic, Transpacific, Asia-Middle East and Asia-Europe routes:
- Gemini Cooperation – the newest alliance in the market comprising Maersk and Hapag-Lloyd.
- OCEAN Alliance - the alliance with the largest group of carriers, consisting of COSCO Group, CMA CGM and Evergreen. Launched in 2017 it has now been confirmed to run until 2032.
- Premier Alliance - rebranded from THE Alliance, this carrier partnership consists of ONE, HMM and Yang Ming.
Notable by its absence from the above alliances is MSC – the world’s largest carrier by TEU capacity. That is because MSC is adopting a standalone approach in 2025 with some slot sharing agreements.
The ‘best’ carrier/alliance depends heavily on what a shipper is looking for, but below are some factors to consider:
Number of services (loops)
OCEAN Alliance comes out on top, offering the most services on five out the six major trade lanes. Only on the Transatlantic trades does it not take top spot, sitting behind both Gemini and MSC.
Operated capacity (owned and chartered)
Comparing alliances, the OCEAN Alliance will be the largest by quite a margin. Based on today's fleet it has 28.9% of global capacity. In second place is Gemini closely followed by MSC, while the Premier Alliance trails behind with only 11.5%.
Limited port calls in Singapore
Conflict in the Red Sea saw carriers re-route services around Africa and inadvertently cause the major transshipment hub of Singapore to become an epicenter for congestion.
If shippers are looking to avoid Singapore in 2025, they may turn to Gemini’s hub and spoke model, with services calling at neighboring Tanjung Pelepas on the fronthaul to Europe and Mediterranean. On the backhaul, most services will stop at Singapore and not Tanjung Pelepas.
Conversely, six out of seven services by MSC stop in Singapore on both fronthaul and backhauls routes.
Transit times
Gemini is claiming overall reduction in transit time on major corridors due to ‘improved network’, citing 32 days from Shanghai to Rotterdam. MSC puts transit time on the same route at 35-42 days.
This is where MSC’s slot swaps with the Premier Alliances come into play, allowing it to compete with Gemini and Ocean Alliance on transit times.
Winners and losers at port level
Shifting alliances will have a big impact at port level.
If you are shipping cargo from the Far East to Antwerp, then MSC is likely to be your preferred supplier with four weekly calls in 2025. This compares to one call a week with Premier Alliance and none from Gemini.
A key point for shippers is to not assume your existing carriers will continue to call at the same ports in 2025.
Xeneta data is supporting shippers in identifying the right provider for their supply chain by benchmarking providers’ port-to-port freight rates, reliability, capacity, transit times, surcharges and CO2 emissions.
Carrier and freight forwarder strategies
Some of the shifts in alliances can be explained by carriers’ different strategies. Maersk and MSC being a clear example, the former concentrating on becoming an integrator with a heavy exposure to the long term market, contrasting with the latter’s concentration on being a carrier with a higher spot market exposure. While MSC has been buying freight forwarders, it keeps them under a separate brand, much like CMA CGM with CEVA, whereas Maersk is keeping it under the same brand.
Shippers should take these different strategies into account, considering the benefits and disadvantages of each and how they apply to their supply chains – there is no one answer fits all. Freight forwarders also need to make their own decisions – but may well find it easier to work with carriers such as CMA CGM and MSC on the ocean side who are not direct competitors as Maersk is striving to be.
There are also changes on the freight forwarder side, the most notable being DSV’s acquisition of DB Schenker*, the outcome of which is at yet unknown, but just as with shifting alliances, shippers should be awake to the changes and understand how best to react to them.
New customers are always up for grabs following a mega-merger and this time will be no different as freight forwarders compete to gain market share.
Footnote: Integration of Schenker into DSV is expected to begin in Q2-2025 following regulatory approvals and conditions fulfilled.
“Shippers must understand what the new alliances are offering on the trades they utilize – and it comes down to far more than price. It is a balance between cost, reliability and transit time, while also being aware the carrier you currently use may not be the best one going forward. Keep your options open, do not be afraid to challenge carriers and seek assurances they can deliver what they are promising, particularly around service reliability.”
Peter Sand
Chief Analyst, Xeneta