April 1, 2017 marks the beginning of the new ocean carrier alliance structure and it is expected to cause congestion problems in the U.S. Experts have voiced concerns stating that any process that sways from the normal routine at the ports will cause operational delays and these alliances are associated with many changes. Vessels will be calling ports on different days, larger vessels will be calling different ports than usual and organizational structures and responsibilities will change.
Ports with multiple terminals such as Los Angeles and Long Beach will notice the most disruption. Beneficial cargo owners are looking to route cargo to alternative ports anticipating operational issues. According to PIERS, in November and December 2016 East Coast imports from Asia grew 12 percent while the West Coast grew 9 percent. In particular the port of Savannah has experienced substantial growth which is thought to be a direct result of beneficial cargo owners avoiding West Coast issues. With the new alliance structure this trend is likely to continue.
The new alliances will need to develop working relationships, create IT systems that work together, and coordinate processes which will take time but should be underway by the time 2017 peak season begins. This will not be the first time that ocean carrier alliances are shuffled but this is the biggest change affecting the most amount of carriers all beginning on the same day.
Beginning April 1 there will be three ocean carrier alliances rather than the four that currently exist. The “Ocean” and “THE Alliance” were newly created and there is the preexisting “2M” alliance that has new agreements with Hyundai Merchant Marine. Although the 2M agreement with Hyundai Merchant Marine is not an official alliance it does bring to light that almost every major carrier is affected by the changes effective April 1. Maersk Line has also purchased Hamburg Sud and the sale negotiations should be completed by the end of 2017.
New carrier alliance structure as of April 1, 2017:
Ocean: CMA CGM, China Cosco Shipping, Evergreen, and Orient Overseas Container Line
THE Alliance: Hapag Lloyd, NYK, K Line, MOL and Yang Ming
2M: Maersk and Mediterranean Shipping Co.