Dive Brief:
- The tenth largest ocean carrier, ZIM, signed a "strategic cooperation" with the 2M Alliance between Maersk Line and MSC to jointly operate five service loops between Asia and the U.S. East Coast as of September 2018.
- The deal, signed Thursday, increases ZIM's range of direct calls in both regions with added port coverage and faster transit time, according to a press release. It also boosts capacity for 2M, as a result of an added slot-sharing agreement.
- 2M will operate four of the five loops, while ZIM will run one, for a term of seven years. The parties will release "more information about network changes and schedules on the trade as soon as possible," ZIM said in the release.
Dive Insight:
Soon, ZIM customers will be able to book a shipment from Asia to the U.S. East Coast but have it travel on a Maersk or MSC ship. Similarly Maersk and MSC shipments may soon travel on ZIM vessels.
Such "slot-sharing agreements" are widespread, and form the basis for global shipping alliances as they help boost carriers' network and scale, without investing in added capital.
ZIM's deal with 2M is not a formal incorporation into the alliance, however.
It is a "strategic cooperation" reminiscent of HMM's deal with Maersk and MSC: Expansive enough to scale the service network and capacity, but not enough to significantly increase the parties' co-dependency and, therefore, risk.
Still, it does bring with it some costs and benefits of sharing service with other carriers.
ZIM was one of the last remaining independent carriers with more than 1% market share of global capacity, and the Israeli carrier wore it with a badge of honor.
Surveys consistently placed ZIM as one of the most reliable carriers, calling into question the customer-service benefits of the global shipping alliance system. Fortunately, Maersk and MSC also frequently receive high marks on reliability, minimizing disruption.
For its part, ZIM appears to prefer being a non-full member of the alliance.
"We will continue to be independent, building on our personal links with our customers, for which we are so well known in addition to our ongoing technological initiatives such as our successful blockchain project," Zim said in a statement.
But its East-West trade deal with 2M makes it slightly reliant on the world's two largest carriers. Now, Wan Hai and PIL are the last two "independent" carriers without an association with a major alliance.
With reports of CMA CGM's attempted merger with Hapag-Lloyd, news of ZIM's deal with 2M begs the question: Is consolidation in the ocean shipping industry about to ramp up, once again? If so, what role will niche and smaller lines play?
