Higher Fences for Trade Will Mean More Debt And Slower Growth
(Bloomberg Markets) — A hot war in Ukraine, a trade war between China and the US, and Donald Trump’s threat of sweeping tariff increases raise the prospect of an accelerated...
By Mike Wackett (The Loadstar) –
The world’s largest container line, MSC, is joining in an alliance with tenth-ranked Zim across “multiple trades”, as both carriers prepare for life outside their cooperation with Maersk within the 2M Alliance.
The Israeli carrier said it had made “a new operational agreement with MSC, encompassing several trades”.
Zim explained: “The cooperation scope includes services connecting the Indian subcontinent with the east Mediterranean, the east Mediterranean with Northern Europe and services connecting East Asia with Oceania.”
It added that the agreements included vessel sharing, slot purchases and slot swap arrangements.
The more comprehensive agreement with MSC follows two vessel-sharing agreement (VSA) deals at the end of last month.
The first involved Zim pulling ships out of its Asia-Australia/New Zealand trades in favour of a VSA with MSC’s Panda loop. This, subject to regulatory approval, Zim will brand its ZAX service and will contribute three of the seven circa-5,000 teu ships deployed.
In terms of its two other Oceania services, Zim will become a slot charterer on MSC’s Kiwi Express and Capricorn loops and, as a consequence, will be able to free up ten 2,500-2,800 teu chartered vessels to either deploy elsewhere, off-hire or seek to sublet.
Thereafter, MSC announced a VSA with the Haifa-headquartered carrier between North Europe and Israel, deploying five 6,700 teu ships with Zim providing two ships.
Until now, the North Europe to Israel VSA has not been officially confirmed by Zim, although the cooperation with MSC between North Europe and the eastern Mediterranean also includes a slot charter to cater for Zim’s trade with Turkey. Additionally, Zim’s restructured India-Israel and India-Turkey services will also feature a VSA with MSC, with Zim providing the tonnage for two strings.
And Zim president and CEO Eli Glickman hinted of “more” VSAs with the Geneva-based carrier and said: “Capitalising on this opportunity with MSC will improve efficiencies in our fleet and is consistent with our focus on taking proactive steps amidst continued near-term headwinds in the container shipping market.”
He added that he expected the cooperation with MSC to benefit Zim “operationally and financially”.
The next VSA between Zim and MSC could be between Asia and the US east coast, after the 2M Alliance is terminated at the end of next year. Zim and the 2M currently cooperate with a slot and VSA on the tradelane, with the agreement set to expire upon the demise of the 2M.
Meanwhile, Zim is also in the process of taking delivery of ten 15,000 teu LNG-powered vessels, via long-term charters with non-operating containership owner Seaspan, which it intends to deploy between Asia and the US east coast.
While MSC is clearly prepared to enter into VSAs with other carriers, in order to grow its markets in other tradelanes before and after the 2M divorce is finalised, Maersk will take a different approach, according to its CEO, Vincent Clerc.
While not ruling out slot swap agreements post-2M, Mr Clerc is not a big fan of VSAs.
“You have the disadvantage of being a 3PL, of having half of your customer promises riding on somebody else’s ship,” he explained.
The Loadstar is known at the highest levels of logistics and supply chain management as one of the best sources of influential analysis and commentary.Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.
Join the 110,620 members that receive our newsletter.
Have a news tip? Let us know.
Access exclusive insights, engage in vibrant discussions, and gain perspectives from our CEO.
Sign UpMaritime and offshore news trusted by our 110,620 members delivered daily straight to your inbox.
Essential news coupled with the finest maritime content sourced from across the globe.
Sign Up