What does the future hold for container shipping alliances and price competition among ocean carriers? How low will spot and long-term freight rates go in the Asia-U.S. trade? And what happens when a massive wave of new container vessels starts hitting the water in the months ahead?
These are just some of the issues addressed by Vespucci Maritime CEO Lars Jensen and Xeneta CEO Patrik Berglund during FreightWaves’ Global Supply Chain Week (GSCW) virtual forum on Tuesday.
The decision to terminate the 2M shipping alliance between the world’s two largest carriers, MSC and Maersk, “is just the first domino to fall,” predicted Jensen, one of the world’s top experts on container shipping.
While 2M is scheduled to continue until January 2025, he expects the breakup to be apparent sooner.
“To me, it’s like you have two parties who have agreed to divorce who say, ‘By the way, we’re going to divorce, but not until two years down the line.’ They’re going to go out and find other friends in 2023.
“I don’t see 2M effectively operating as 2M until January 2025 and then suddenly dissolving. It’s going to be a gradual dissolution, basically starting now.”
But an alliance shakeup does not guarantee lower rates for cargo shippers, he maintained. “I would caution shippers not to focus on alliances versus nonalliances as a link to whether rates are high or low. I don’t see very much of a link between those two.
“The extremely high rates we saw [during the pandemic] had nothing to do with alliances or nonalliances and everything to do with physical unavailability of vessels due to congestion.” The boom in 2021-22 was a “historical aberration we are unlikely to see again,” said Jensen.
During the second quarter of 2020, when COVID lockdowns in the U.S. and Europe peaked, container alliances proved very adept at “blanking” (canceling) sailings to artificially reduce supply to match demand, limiting rate reductions.