18 January 2024 (Lloyd's List) - GEMINI Cooperation, the new carrier tie-up announced between fellow European carriers Maersk and Hapag-Lloyd, will have fleet capacity at its disposal that could match or even exceed that of the world's largest line Mediterranean Shipping Company on the trunk liner trades, according to initial estimates.
On Wednesday, Maersk and Hapag-Lloyd unveiled plans from next year to form a new alliance on the major container trades, following the closure of the former's existing partnership with 2M. The creation of the Gemini Cooperation will also see Hapag-Lloyd leave its existing carrier consortia, The Alliance, in 2025.
Gemini Cooperation will see Danish carrier Maersk and Hamburg-based line Hapag-Lloyd operate together on 26 mainline services, between Asia-Europe, Asia-Middle East, Middle East-Europe and on the transpacific and transatlantic trades. In addition, the two lines will operate 32 feeder services to complement the network via hub ports in each key region.
Capacity on the network will be split 60%/40%, with Maersk operating the larger share. Combined the capacity offered under the Gemini Cooperation will be about 3.4m teu using around 290 ships.
Considering the preliminary figures revealed under the Gemini Cooperation, UK-based analysts MDS Transmodal forecasts that combined capacity across the major liner trades will be slightly higher than that of rival MSC.
Further, Gemini Cooperation could also become the most important player on specific routes, namely the transatlantic and Asia-Middle East trades. On these routes, the newly created partnership could have a potential total market share approaching 40%, according to initial MDST estimates.
However, the capacity of Ocean Alliance, comprising French carrier CMA CGM, Chinese giant Cosco and Taiwanese line Evergreen, would dwarf alliance rivals with close to 6m teu at its disposal on deepsea routes. Ocean Alliance would also become the dominant player on the two major east-west routes, namely Asia-Europe and the transpacific, MDST figures show.
Most striking is the diminished capacity of the Alliance, which with Hapag-Lloyd's abrupt departure will now include just the Asian trio of Ocean Network Express, HMM and Yang Ming, is set to become the smallest of the main alliances with combined capacity below that of independent operator MSC.
Although service schedules to be operated by the Gemini Cooperation have still to be confirmed - preliminary schedules are expected to be released to customers in the third quarter of 2024, MDST senior analyst Antonella Teodoro said that initial information released by the partners shows that the collaboration will no doubt hold them in a strong competitive position.
However, she stressed that advisers for the new alliance will be looking closely at how the new partnership stacks up within the European Union's competition boundaries, and similarly within US and Chinese jurisdictions.
Speaking in a press conference shortly after the announcement of the Gemini Cooperation, Hapag-Lloyd chief executive Rolf Habben Jansen said that it remains in "discussions with most of the regulatory authorities".
However, he stressed confidence that the research carried out by the respective parties will ensure that the co-operation is fully compliant with existing regulatory frameworks.
What is not in doubt is the key hubs that the Gemini Cooperation will utilise in what is sees as a key component of its network offering.
Hapag-Lloyd and Maersk revealed upon the announcement of its new partnership that these will consist of Singapore and Tanjung Pelepas in southeast Asia; Salalah in the Middle East; Damietta and Port Said in the East Mediterranean; Tangier and Algeciras in the West Mediterranean region; Wilhelmshaven, Bremerhaven and Rotterdam in North Europe; Cartagena in Central America and Lazaro Cardenas on Mexico's west coast.
Habben Jansen noted that these include mostly owned and controlled terminal hubs globally, where either partner has extensive experience.
Using a hub and spoke transhipment model out of these hubs will make the network more "reliable and resilient", he explained.
This he said can be best demonstrated by the success of the airfreight model.
"The way that we will set it up is so that all loops will have two/three main port calls per region, where they will also call the hubs.
"That means that the risk of delays will be significantly less. In addition to that, we control the hub terminals, which means that we can also control priorities and waiting times."
With feeder services at a high frequency from hub terminals to final destinations it will also ensure of the same transit times of a direct service, Habben Jansen said.
The Gemini Cooperation is due to begin operations in February 2025.
