We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • ::COVID-19 COVERAGE::
  • INDUSTRY PRESS ROOM
  • ABOUT
  • CONTACT
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC.
    • Podcast
    • Blogs
      • Analytics & Big Data
      • Best Practices
      • Dispatches
      • Empowering Your Performance Edge
      • Logistics Problem Solving
      • One-Off Sound Off
      • Public Sector Logistics
      • Two Sides of the Logistics Coin
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • MODEX 2020
    • Upload Your Video
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC.
    • Podcast
    • Blogs
      • Analytics & Big Data
      • Best Practices
      • Dispatches
      • Empowering Your Performance Edge
      • Logistics Problem Solving
      • One-Off Sound Off
      • Public Sector Logistics
      • Two Sides of the Logistics Coin
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • MODEX 2020
    • Upload Your Video
Home » FMC approves THE Alliance vessel-sharing agreement
newsworthy

FMC approves THE Alliance vessel-sharing agreement

December 16, 2016
Toby Gooley
No Comments

The Federal Maritime Commission (FMC) approved the proposed five-carrier "THE Alliance" vessel-sharing agreement to operate in U.S. trades after the consortium agreed to remove language to grant it antitrust immunity to collectively negotiate prices and to purchase such services as tugs, chassis, and stevedoring.

Under terms of the agreement, which is expected to be operational in April, the members are permitted to share vessels, charter and exchange space on each other's ships, and enter into what the FMC called "cooperative working arrangements." The five members are Germany's Hapag-Lloyd, Taiwanese carrier Yang Ming Line, and Japanese carriers Kawasaki Kisen Kaisha ("K" Line), Mitsui O.S.K. Line (MOL), and Nippon Yusen Kaisha (NYK).

Maritime industry groups and the Department of Justice had expressed concern about the provision that would have conferred antitrust immunity on the agreement. And in a Dec. 7 speech to the North Atlantic Ports Association, FMC Commissioner William P. Doyle said he had "serious concerns" about the carriers' joint contracting and purchasing power. "It would not be fair to grant ocean carriers the ability to jointly contract and procure services while the domestic service providers cannot negotiate collectively," he said.

The FMC required the Ocean and 2M vessel-sharing agreements to remove similar language as a condition for agency approval. Instead, the carriers must negotiate most rates and services individually. The Ocean Alliance may negotiate jointly with marine terminals that agree to do so, Doyle said in his remarks.

Unusually, THE Alliance's agreement, which was filed after the Aug. 31 bankruptcy of South Korean liner company Hanjin Shipping Co., includes what Doyle called "framework language" that specifies how member carriers could assist customers and maintain service continuity in the event an alliance member fails.

Vessel-sharing agreements, or VSAs, have proliferated in recent years as carriers attempt to rationalize their vessel capacity in the wake of massive losses brought on by excess space on many global trade lanes. The advent of mega-container vessels, with capabilities of handling up to 18,000 twenty-foot equivalent unit (TEU) boxes per voyage, has added to the overcapacity problem.

THE Alliance's lineup reflects the ongoing chaos in the container shipping industry. All of the members previously belonged to other carrier alliances that are breaking apart, and the three Japanese lines have been directed by the Japanese government to begin operating as a joint venture in July 2017. The original THE Alliance proposal included the now-defunct Hanjin, and early plans called for the involvement of United Arab Shipping Co. (UASC), now in the process of merging with Hapag-Lloyd.

Hyundai Merchant Marine (HMM) had said it would join THE Alliance, but it later fell out due to its own financial struggles. HMM has mostly stabilized its operations, but continues to face financial challenges. It recently signed a slot-charter agreement with the 2M Alliance, comprised of Danish carrier Maersk Line and Swiss liner Mediterranean Shipping Co. The 2M Alliance denied HMM full membership in the agreement, and recently informed customers that were concerned about HMM's financial condition that it would not load their cargo on HMM's ships without their prior approval.

Transportation Maritime & Ocean Regulation/Government
KEYWORDS "K" Line Hanjin Shipping Hapag-Lloyd Hyundai Merchant Marine Maersk Line Mediterranean Shipping Co. Mitsui O.S.K. Lines (MOL) NYK Line United Arab Shipping Co. Yang Ming Marine Transport
  • Related Articles

    FMC approves OCEAN vessel-sharing pact

    FMC approves information-sharing pact between ports of Seattle, Tacoma

    Maersk, MSC launch 10-year vessel sharing pact

Contributing Editor Toby Gooley is a writer and editor specializing in supply chain, logistics, and material handling, and a lecturer at MIT's Center for Transportation & Logistics. She previously was Senior Editor at DC VELOCITY and Editor of DCV's sister publication, CSCMP's Supply Chain Quarterly. Prior to joining AGiLE Business Media in 2007, she spent 20 years at Logistics Management magazine as Managing Editor and Senior Editor covering international trade and transportation. Prior to that she was an export traffic manager for 10 years. She holds a B.A. in Asian Studies from Cornell University.

Recent Articles by Toby Gooley

Better together

Rightsizing your forklift fleet in uncertain times

National Forklift Safety Day 2020 focuses on safety best practices

You must login or register in order to post a comment.

Report Abusive Comment

Most Popular Articles

  • Relaxed regulations for drone parcel delivery to take effect in March

  • Gartner survey signals increased investment in resilience over the next two years

  • Increasing Urgency for Vaccine Supplies Drives Launch of New Vaccine Manufacturing Resources on Thomasnet.com

  • What Level of Automation is Right for Your Warehouse?

  • Old Dominion adds nine freight service centers to handle business growth

Now Playing on DCV-TV

20210226acd usa vs

MAX Mobile Workstation in action in leading 3PL improves efficiency in operations. Watch it now!

DCV-TV 4: Viewer Contributed
MAX Mobile Workstation, from ACD USA, Inc., is ideally suited for data collection and many tasks that workers handle throughout the Distribution Center, Manufacturing Plant, Cross Dock, and more.  This customer testimonial from Goldhofer shows the high quality industrial design and functionality of MAX, which is...

FEATURED WHITE PAPERS

  • Time to rethink your lift truck power

  • Warehouse Management System Project Toolkit

  • Solving Talent Management Challenges Now and In the Future

  • Shaping Up Last Mile Delivery to Surpass Customer Expectations

View More

Subscribe to DC Velocity Magazine

GET YOUR FREE SUBSCRIPTION
  • SUBSCRIBE
  • NEWSLETTERS
  • ADVERTISING
  • CUSTOMER CARE
  • CONTACT
  • ABOUT
  • STAFF
  • PRIVACY POLICY

Copyright ©2021. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing