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Shipping Logistics | International Logistics | International Freight Forwarder | Guangzhou Freight Forwarder | Panyu Freight Forwarder | Hongde International "Withdraw from the US Line? Wanhai and Hebo-Lloyd Joint Venture to the US-East Route! The competition and cooperation relationship between shipping companies is subtle"

Mar 23,2023

Wanhai Shipping, which has been in and out of the US line for more than two times, now that the freight rate of the US line has dropped to only one tenth of the peak period, the industry cannot help but speculate that the company may withdraw from the US line again. However, Wanhai responded to the rumors with actions,From April 1, 8500-13100TEU container ships will be used to jointly operate the Asia-East US route with Hapagloit, the world's fifth largest liner company.

Alphaliner the information provided to the customer mentioned Wanhai's cooperation case. Wanhai said that the Alphaliner should obtain relevant information based on the company's declaration to the US Federal Maritime Commission (FMC). FMC information is publicly available.

Hapg-Lloth, who originally leased the Wanhai Asia-East AA7 route, has now decided to send a joint ship with Wanhai to operate the East US route,Starting from April, the two companies jointly put 12 8500 to 13100TEU container ships into the US-East route., Wanhai will provide eight box vessels and Hapag-Lloth another four.

The AA7 route is currently operated by Wanhai with 11 4250-7240TEU container ships, after joint operation with Hapg-Lloitt and replacement of large ships,Wanhai's original US East AA9 route will be merged into AA7, so the company's total cabin on the US East route will not change much.

The ship will be attached to Shanghai, Ningbo, Taipei, Xiamen, Shekou, Gaimei and Singapore, sailing to New York, Norfolk and Savannah via the Suez Canal, and returning to Shanghai via the Panama Canal.

Both shipping companies have submitted a new ship-sharing agreement to the Federal Maritime Commission in Washington for a new service system with a short term of 12 months. Alphaliner believe the agreement will help Wan Hai fill its 13100-13250 boxes of newbuild cabins.

Wanhai has ordered a total of 18 13100-13250TEU container ships. Of the 4 ships delivered, 3 are deployed on the AA3 route from the Far East to the West of the United States. The fourth ship has joined the West of South America route earlier this month. It is estimated that the fifth ship may be put on the East of the United States.

Is it unwise for the two shipping companies to jointly operate the US-East route?

Some people in the industry believe that it is unwise for Hapag-Lloth to expand the capacity of the US-East route at this time. Alphaliner also describe that Hapag-Lloth will help Wanhai fill its 13000-box series of newly built ships. However, Xie Zhijian, former chairman of Yangming Shipping, believes that,The joint venture of the two companies is a "high trick".

People who are not optimistic believe that at present, the freight rate on the US-East route continues to fall, and there is little chance of a recovery this year. It is estimated that there will be only a brief recovery in the peak season. It is no wonder that zui on the US-East route has been falling recently. In the second quarter, it is difficult to sign a good annual contract price due to the current inflation situation in the United States. If the shipping companies do not have a consensus on regulating space, how the freight rates will recover.

Xie Zhijian believes that both companies need to arrange the launch of new shipbuilding. Joint venture is zui's good choice. If Hapo-Lloth does not cooperate with Wanhai, Wanhai will still find other partners. Although the ships are much larger, Wanhai will combine the original two US-East routes into one, so the capacity will not increase much.

In addition, the two companies choose the US-East route to bypass the Suez Canal. The disadvantage is that the cargo from both sides of the Taiwan Strait to the US-East will increase the voyage by more than one week. However, the ships call at Vietnam's Gaimui Port and Singapore, which can take over the cargo from both sides of the Taiwan Strait to Indonesia, Malaysia and North Vietnam. At the same time, they can also take over the cargo from Southeast Asian countries to the US-East, which can be carried, it also solves the current migration of many industries to Southeast Asia, China guo mainland exports to reduce the pressure of 10,000-box-class large ships, on the other hand, by lengthening the voyage, lower the turnover rate of ships, to reduce the pressure of excess market capacity.

Another situation is that the West-American Dockers' Union (ILWU) and the Pacific Maritime Association (PMA), which represents terminal operators and shipping companies, have not reached an agreement since the contract expired at the end of June last year. Importers in the Midwest of the United States are worried about the ba worker incident and have transferred imported goods to the East US ports. Last year, the container handling volume in Los Angeles and Long Beach in the West of the United States decreased by 5.1, while in New York and New Jersey grew by 5.7, at present, the US-East route still has advantages.

Xie Zhijian pointed out that the competition and cooperation relationship between shipping companies is very subtle. In the past, when he was the general manager of the Italian LLOYD TRIESTINO(LT) invested by EVA Group, Israel Star Shipping (ZIM) proposed to rent 200 shipping spaces per voyage on the LT Far East-Mediterranean route. However, after the headquarters rejected it, Star opened up the Mediterranean route itself, greatly increasing the competitive pressure of LT. In addition, Mediterranean Shipping (MSC) learned that LT wanted to open an African route, offered attractive terms, and was willing to provide LT African route space, without limiting the number of spaces, in order to reduce competitive pressure and relax its rival's attempt to open up new routes.

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