Dwell Times in Canadian Ports Increasing

Dear Valued Customer,

The Dwell Time at certain Canadian Ports are beginning to become an issue again. Dwell Time is basically the time between when the import vessel discharges the containers, and the time that the said container gets loaded onto a rail car.

Generally, this Dwell Time has been increasing. Its effects are unpredictable unfortunately. One container from a vessel can be on the rail in 3 days, while another container from the same vessel, coming to the same inland city by rail, can take 10 days. There are also some nightmare incidents when a container can be buried so deeply in a pile, that it takes more the 10 days to get loaded.

There is only so much that can be done when this happens. We push the ocean carriers once a container has sat for more the three days – which is generally considered to be the standard dwell time.

Please see the overview directly below. This will give you some indication as to the potential for delays. The other issue is with CBSA Container Inspections. There is no data available as records are not released by the Government Agency. Anecdotal evidence would point to the fact that the CBSA is pulling more containers, but that could be, as the Government states, simply because there are more import containers. The end result is that it is taking considerably longer to get the containers inspected due to the volume of containers being pulled. This can lead to a deeply frustrating situation that we do share with you.

Should you want more information regarding this situation including some charts and detailed information about each port, please email us at [email protected]

OVERVIEW
-Delta Port: Longer and higher than usual dwell for IPI Import. 14% of import IPI volume had beyond 7 days on dock dwell in the recent 35 days. As per Delta port loading plan on the 7 days and over units Toronto will load by 9/17, Montreal by 9/19, Calgary and Edmonton by 9/18.
-GCT Deltaport moved out 22,388′ rail cargo in average this week. Average Dwell: CN/5.52 days, CP/3.41 days.
-GCT continued to truck out around 10,000′ (200 units) to CN and CP ramp on daily basis.
-GCT Deltaport yard utilization is about 80% last week.
-CN VIT: VIT terminal congestion improved. 150 units currently at VIT are within 3 days dwell.
-Prince Rupert: Longer dwell, 7 /8 days dwell for Montreal and Toronto destinations.
-Halifax Ceres Terminal: No delay with rail loading. Most of IPI discharge at Halifax Ceres terminal are loaded upon discharging off the vessel.

Pearson Ground Crew Strike Continues after Union Votes 98% against Swissport Contract Offer

From CIFFA Bulletin, 2017-08-24

  • Pearson Ground Crew Strike Continues after Union Votes 98% against Swissport Contract Offer

The union representing some 700 baggage handlers, cabin cleaners and other ground crew has voted overwhelmingly against a contract offer by Swissport, meaning workers won’t be ending their work stoppage, which has gone on four weeks already.

Teamsters Local 419 says 98 percent of its members voted to reject the deal.

 Members should expect delays at the airport to continue. CIFFA will contact the Greater Toronto Airports Authority (GTAA) today to express our concerns about the impacts of the strike.

 With information from CBC News.

CN Rail Makes Service Changes at Port of Vancouver to Reduce Dwell and Transit Times!!

As report by CIFFA in its Daily Bulletin:

 

In a service update last week to customers, CN advised of recent changes at the Port of Vancouver designed to improve overall service reliability and reduce transit times.

 

Centerm and Vanterm

 

Rail operations

Effective January 2nd, CN now services the waterfront directly and performs all Centerm and Vanterm terminal switching operations for CN customers. Waterfront traffic is now routed through CN’s Thornton Yard instead of the previous routing via CP’s Coquitlam Yard. From the time of the service change, the average rail transit time has been reduced by approximately 24 hours compared with the previous switching/transit plan.

– Centerm: CN is currently spotting and pulling between 6,000 and 8,000′ per day.

– Vanterm: CN is currently spotting and pulling between 11,000 and 12,000′ per day.

– CN reports that it is seeing an improvement in the timely repair of bad order rail equipment no longer going to Coquitlam. Dwell times are significantly reduced.

 

Trucking to support reduced dwell

– To assist with port dwell, CN is currently trucking Western Canada-destined traffic (for Calgary and Edmonton) each day to its Vancouver Intermodal Terminal (VIT) from both terminals.

– Centerm: Commencing last week, to reduce ground counts, DP World is now trucking between 150 and 180 units per day to CN Vancouver Intermodal Terminal.

– Vanterm: GCT is trucking up to 100 units per day to CN’s Vancouver Intermodal Terminal for furtherance to inland destinations

– CN has increased people and equipment around the clock to handle increased truck gate and terminal volumes at VIT.

 

NEW: Use of Additional Rail Capacity at Fraser Surrey Docks (FSD)

 

– CN and FSD have been working together on an operating service plan to add surge capacity to support overall port fluidity with more off-dock trucking.

– CN will commence this week delivering loaded railcars for furtherance via truck to Vanterm, Centerm and Deltaport

– This is a temporary service offering to support the timely evacuation and delivery of pre- and post-Chinese New Year peak volumes.

 

Deltaport

 

– Daily rail operations continue as planned. To supplement overall demand, CN and GCT continue to work closely on a trucking program, with up to 200 trucks per day moving through CN’s Vancouver Intermodal Terminal.

DELAYS in VANCOUVER

Dear Valued Customer,

 There has been a recent upsurge in container carryings, much of it associated with the Chinese New Year.  As a result, we have begun to experience longer than usual delays at the Vancouver Terminals and with CN and CP Rail. 

Dwell time at the terminals in Vancouver have become a great concern.  They are averaging 5-7 days at the terminal before being loaded onto a rail car.  All ocean carriers and freight forwarders are being equally affected by this spike in volume.  We will do all in our power to keep the containers moving, but you should expect some delays.  If your container has not yet arrived in Vancouver and it is urgent, Express Rail Service (ERS) MAY be an option.  ERS does come at an extra cost though.

 Please discuss with your Maltacourt Import Coordinator.

 We will keep you advised of future changes.

Seasons Greetings from Maltacourt

Seasons Greetings to our Customers and our Partners around the World~!!

Maltacourt Canada will be closing at 1700 hrs on Friday December 23rd and at 1700 hrs on Friday December 30th.

Our office will be closed on:

December 26th for Christmas Day

December 27th for Boxing Day

January 2nd for New Years Day

We will be operating and fully functional on December 28th , 29th, and 30th.

 

I would like to take this moment on behalf of the Maltacourt Canada family to sincerely thank you for your trust, support, and friendship throughout 2016.

We wish you a Merry Christmas, and all the best in the New Year of 2017.

Some Solutions at Centerm (Port of Vancouver)

CN has confirmed that, beginning today, it will switch up to 4,000 ft. daily from Centerm, and continue to truck volume off south shore terminals as needed. This will be in addition to CP’s regularly scheduled switching activity.

The Vancouver Fraser Port Authority continues to publish a rail production report daily to keep stakeholders informed. You will note that, beginning with the December 8 report, a “heat map” is included to show daily import rail on-dock footage at a glance. The report can be found here.

Deltaport makes it the Trifecta of Delays at Vancouver Terminals

from the CIFFA Bulletin (December 9, 2016)

First it was Vanterm and Centerm facing critical delays in terminal operations, due primarily to inefficient rail switching. The cause of these backlogs is not related to rail-equipment availability or long-haul rail issues. This is purely an on-dock switching issue and one that could possibly have been mitigated or avoided by better oversight or transparency among the players. After several weeks, the Inner Harbour terminal switching issues are being addressed, and it is expected that backlogs — which have been averaging more than a week — will be reduced by Christmas.

 Meanwhile, average dwell times at Deltaport have crept up, to between 4 and 5 days from November averages of 2½ to 3½ days, and there are some outlier groups of containers sitting for as many as 8 to 10 days. And so, the third major container terminal joins Vanterm and Centerm with delays. Unlike the Inner Harbour terminals, Deltaport delays are due to factors beyond their control: high winds that have hampered or shut down crane operations, and vessel bunching caused by typhoons at sea.

 Deltaport has advised that it is trucking aggressively and, as of yesterday, is delivering approximately 25,000 to 30,000 feet per day, including trucking to CN VIT / CP VIF to expedite the recovery. As of yesterday, there were:

            –88,000 for CN, with average on-dock dwell of 3.76 days

             -44,000 for CP, with average on-dock dwell of 4.37 days

Visit the Port of Vancouver here and scroll down slightly to read “Container terminal rail performance” under the Rail Metrics heading. To help increase visibility of the intermodal supply chain, the container rail performance update provides a terminal-level summary of the import rail footage on-dock, the estimated planned car supply, and the actual rail car production on a daily basis. The report is updated daily.

 

Regardless of the reasons for the delays and congestion, the impacts are felt by everyone. Importers face delays in receiving their 2016 pre-Christmas merchandise. Combined costs as high as $600 per container for ERS or ETRS service plus gate fees makes expedited service expensive. More trucks are on the road, so emissions and traffic congestion are increased. Vessels are parked at anchor waiting to discharge or load, so exports are also delayed, and already stressed carriers face additional and unanticipated operating expenses. Vessel rotations are affected and knocked off schedule, which will have a carry-on effect as we prepare for an early Chinese New Year at the end of January.

Hapag-Lloyd gets EC competition green light to complete UASC merger

By
Excerpt of article published in Loadstar,

The European Commission yesterday approved the merger between Hapag-Lloyd and UASC – subject to the latter withdrawing from the North Atlantic trade.

A Hapag-Lloyd spokesman told The Loadstar the company was “delighted” with the news.

With a combined capacity of 1,478,236 teu, the merger will make the new entity the fifth-largest ocean carrier, well ahead of Evergreen, at 991,470 tea, and marginally behind China Cosco Shipping, which has a capacity of 1,572,335 teu.

An EC statement said: “The clearance is conditional on the withdrawal of UASC from a consortium on the trade routes between Northern Europe and North America, where the merged entity would have faced insufficient competitive constraint.”

EC competition commissioner Margrethe Vestager added: “European companies rely on container liner shipping services for their transatlantic shipments. It’s very important that the markets remain open.

“The commitments offered by Hapag-Lloyd ensure that the takeover will not lead to price increases on the routes between Northern Europe and North America.”

Mr Habben Jensen said, during the company’s third-quarter financial presentation on 14 November, that the rationale for the merger was improved scale, providing access to UASC’s “young and fuel-efficient fleet” of 61 ships, including ULCVs.

He explained that to be competitive, Hapag-Lloyd would have needed “significant investment” in ULCVs, but with UASC’s fleet of six 18,000-teu and eleven 15,000-teu ships, there was now no need. Fleet expenditures had “basically been pulled forward”, he said.

He estimated that synergy savings from merging the container lines would be $435m a year from 2019.  The majority will come from network optimisation and reduced overheads, including the consolidation of corporate and regional headquarters, the rationalisation of country organisations and overhead reductions such as operations, marketing and audit. At the end of September, Hapag-Lloyd had 9,397 shore-based and seafaring employees. At the time of its takeover of CSAV’s container business, the combined head count was over 11,000.

The joint container venture between japan’s “big 3” will have a fleet capacity of 1.38 million teus

From American Shipper

The joint container venture between Japan’s ‘Big 3’ will have a fleet capacity of 1.38 million TEUs, making it the sixth largest in the world, and when their 23 new ships are delivered, the merged operation will become the fifth largest carrier.  On Oct. 31, the three largest ocean carriers in Japan – Nippon Yusen Kabushiki Kaisha (NYK Line), Mitsui O.S.K. Lines Ltd. (MOL), and Kawasaki Kisen Kaisha, Ltd. (“K” Line) – announced they would form a joint venture to integrate their container shipping businesses, including their terminal operations outside of Japan.  NYK and MOL have cooperated since 2012 as members of the same space sharing partnership, the G6 Alliance, and next April all three carriers will be part of the new “THE Alliance” along with Germany’s Hapag-Lloyd and Yang Ming of Taiwan.

A senior container shipping executive familiar with the Japanese carriers said the new joint venture will be an advancement in consolidation beyond THE Alliance.  “Common fleets, common management, common pricing will be far superior to alliances, which are too loose to really help stabilize the international marketplace, which is essential for international businesses,” he said. “It is about time. This has been discussed for years.”

Jim Blaeser, vice president in the maritime practice at AlixPartners, said “they needed to do something – with all the other M&A activity, this probably became the most predictable. They had to do something.  “I would commend the management of the Japanese lines for doing this in a rather thoughtful manner,” he added. While it may be overdue and a reaction, at least in part, to the insolvency of Hanjin Shipping, he said it was better to act now, rather than wait until the “11th hour.” “I think they are doing the right thing and getting ahead of it,” said Blaeser.

The so-called “Big 3” Japanese carriers said their joint container venture will have a fleet with a carrying capacity of 1,382,000 TEUs, making it the sixth largest in the world behind Maersk Line, Mediterranean Shipping Co. (MSC), CMA CGM, COSCO Container Line, and Hapag-Lloyd. When the 23 new containerships the three carriers have on order from various yards are delivered – they have aggregate capacity of about 360,000 TEUs – the merged operation will become the fifth largest carrier, according to the London-based consultant Drewry.

The combination of the container businesses of the three Japanese carriers caps an eventful year for the liner industry, one in which CMA CGM acquired Neptune Orient Line and its APL business, COSCO merged with China Shipping Container Lines (CSCL), Hapag-Lloyd announced it was acquiring United Arab Shipping Co. (UASC), and Hanjin filed for bankruptcy protection. A South Korean bankruptcy court has already put Hanjin’s assets in the Asia-U.S. trade up for sale, and as this issue was going to press, fellow Korean shipping company Korea Lines, which until now has not been a player in container shipping, instead operating dry bulk ships, tankers, and gas carriers, appeared to be the leading bidder.

Blaeser also noted that consolidation is nothing new for the Japanese shipping industry.  A corporate genealogy of the current three carriers published by industry analyst Alphaliner showed how 12 Japanese carriers were merged into six companies in the 1960s, and then further whittled down to the current three during the 1980s and 1990s.  The fleets of all three carriers “are weighted toward sub-8,000 TEU size,” Blaeser said. “In today’s market, you are not going to make any money with those size ships in the major east-west trades.”  By using larger vessels, “collectively they now have the ability to make very competitive loops on the major trades,” he said. “If they are smart, they will start to wean out the smaller vessels, those on charter they can get rid of easily, and focus on making competitive loops.”  He said an initial assessment by AlixPartners found that with their combined fleets, the three Japanese carriers will be able to offer two “competitive” Asia-Europe strings, a “very competitive” loop between Asia and the U.S. East Coast, and five “truly competitive” transpacific loops with ships with more than 10,000 TEUs in capacity. Of course, as members of THE Alliance, they will have access to many other large ships owned by their vessel sharing agreement partners.

Shared Value. The initial announcement from the carriers was sparse on details, but the three companies said the joint venture will officially be formed on July 1, 2017 and commence business on April 1, 2018. Given the fact that Japanese carriers have shown a willingness to give up or fuse existing brand names – Mitsui O.S.K. Lines, for example, can trace its roots to the merger of Mitsui Senpaku K.K. and Osaka Shosen Kaisha in 1964 – Blaeser said he has no reason to believe they will not use a single “brand” when the merged company begins operating.  The three carriers said they expect to “realize integration effect of approximately 110 billion Japanese yen (close to $1.1 billion) annually and seek swiftly financial performance stabilization.  “The merger effect of JPY 110 billion is based on items that are for certain. We expect the actual amount to be even greater,” they added.

A study by an unnamed third-party organization leads the carriers to believe the biggest synergy gain will be in the area of purchasing.  “The liner business of the current three companies will merge to become one large company, and taking advantage of its merits of scale negotiations/contracts with the vendors should become much more favorable,” the carriers said.  It is not exactly clear how the joint venture will work, but the three carriers said NYK will make a “contribution” of 38 percent and hold a like percent of shares. MOL and “K” Line each will make a contribution of 31 percent and likewise each hold a 31 percent share in the joint venture.  “The contribution ratio was decided based on a study by a third-party organization taking into consideration the asset value, profitability and vessel fleet of each company,” they said. “Although the contribution ratio is different, the three companies are in an agreement to manage the new joint venture on an equal-footing.”  According to the joint statement, the total contribution will be valued at 300 billion yen (U.S. $2.8 billion), which will include fleets and terminal operating businesses outside of Japan.

The companies did not detail those values, or respond to queries from American Shipper.

Curiously, U.K.-based VesselsValue gives a much higher valuation of their combined fleet at $5.2 billion. VesselsValue gave the following estimate of the value of the companies’ “non-chartered in” fleets:

  • NYK: 68 ships with 507,046 TEUs capacity with a value of $2.3 billion;
  • MOL: 35 ships with 307,449 TEUs capacity with a value of $1.7 billion;
  • “K” Line: 31 ships with 240,440 TEUs capacity with a value of $1.2 billion.

The deal does not include terminals in Japan, nor the many other businesses the three companies are involved in – bulk, heavylift and roll-on/roll-off, ferries and offshore energy, engineering and procurement, logistics, air cargo, and real estate, to name a few.  As of Nov. 9, Alphaliner’s Top 100 fleet list ranked the existing container fleets of the three companies as follows:

  • NYK: 11th largest with 97 ships with 505,969 TEUs capacity (267,544 TEUs on 45 owned ships and 238,425 TEUs on 52 chartered ships);
  • MOL: 12th largest with 81 ships with 505,372 TEUs capacity (151,316 TEUs on 22 owned ships and  354,056 TEUs on 59 chartered ships);
  • “K” Line: 15th largest with 60 ships with 352,230 TEUs capacity (80,150 TEUs on 12 owned ships and 272,080 TEUs on 48 chartered ships).

In addition, NYK has orders for 12 ships with a combined capacity of 168,182 TEUs, MOL has six ships on order with 120,900 TEUs of capacity, and “K” Line has an order book of five ships with a combined 69,350 TEUs of capacity, according to Alphaliner.

 

Joint ventures are nothing new to Japanese carriers, but it’s worth noting this deal will include three firms that come from different “keiretsu,” or Japanese business groups. The Oxford Handbook of Business Groups indicates that in the mid-1990s all three were affiliates of one of the six major keiretsu groups in Japan – MOL was part of the Mitsui Group, NYK part of the Mitsubishi Group, and “K” Line part of the DKB Group.  But one of the editors of that book, James R. Lincoln, Mitsubishi chair in international business and finance emeritus at the Haas School of Business at the University of California, Berkeley, said keiretsu group affiliations “don’t matter much anymore.”  “There’s been a lot of cross-group alliancing since the early 2000’s,” he said. “The Mitsubishi Group was something of a holdout. It’s remained pretty cohesive while the others have mostly broken up. But the joint venture between Nissan and Mitsubishi Motors, in which Nissan owns a controlling share of Mitsubishi Motors, signaled that even there things have changed.”

Rising Tide. Drewry said in its Container Insight Weekly newsletter the joint venture is “in keeping with the current wave of M&A activity that is driven by survival instincts and potential cost savings from greater scale economies.”  “An amalgamation of the Japanese lines has been a fixture of industry speculation for decades, and was considered,” the firm wrote. “For it to finally happen shows the heavy pressure the three carriers were under. Container revenues for the companies have been steadily decreasing and the collective loss since 2012 amounts to approximately $1.5 billion,” adding that “this sum is only indicative, as the segments contain some non-container income and the accounting methods differ slightly between carriers.

“Not wanting to repeat the error made in Korea that saw Hanjin Shipping fail by not merging with HMM, the Japanese managers decided to follow the model used in China with COSCO and CSCL,” said Drewry.  “The current wave of M&A among container lines does not directly solve industry-wide overcapacity – only their ability to survive,” it added. “A second, smaller wave of M&A involving medium-sized carriers is a high probability, driven by the need to stop the cost competitive advantage of the bigger lines growing. The industry is moving towards fewer but stronger (and in time more stable) carriers.”  Industry analysts do not believe regulators will try to block the deal due to its scale, relative to other recent M&A activity in the sector.  “Given that the combined size of the Japanese carrier is much smaller than the biggest carriers, I cannot see how the regulators could have a problem with it,” Lars Jensen, chief executive officer of SeaIntelligence Consulting, told American Shipper in a recent interview.  “I have previously pointed out that we had a range of carriers of ‘mid-size’ that on one hand was global, but not big enough to compete on true scale, yet too big to be niche players. This is a move by the Japanese to get the required scale,” he said. “It increases pressure on the remaining mid-sized global carriers like Hamburg Süd, OOCL, Yang Ming and Hyundai, though.”

Dirk Visser, senior shipping consultant at Dynamar and managing editor of its DynaLiners newsletter told American Shipper that he saw the deal as a “necessary, but defensive move.”  “Unless regulators would be living under a stone, they will (should) agree upon this particular joint venture, typically one between (largely) culturally compatible parties,” he wrote in an email.  “The fact alone that the three largest Japanese container operators’ 1.4 million-TEU combined fleet (exactly half of that of MSC or just 44 percent that of Maersk) would only rank sixth today shows that their continued standalone existence would ultimately not be a viable proposition,” said Visser. “The latter would anyway not be in the interest of the Japanese shippers/consignees tending to support their home lines.”

Still, Don Pisano, chairman of the Ocean Transportation Committee of the National Industrial Transportation League, the country’s largest shipper organization, said the Federal Maritime Commission needs to remain vigilant.  “It appears that the carriers have created a situation for themselves in which consolidation and participation in vessel sharing agreements may be an actual requirement in order to survive in the Asia to North America and Asia to Europe markets, which are saturated with overcapacity,” he said. “Our NIT League members want to work with strong and reliable partners focused on service and competitive rate structures. These developments underscore the continuing need for the Federal Maritime Commission to play its vital role in ensuring that any mergers or VSA participation continues to support a competitive market and adequate carrier choices for American shippers.”  “I believe many expected consolidation in the container shipping industry to continue,” said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation. “Our hope is that the merger will help the overall container industry become more cost effective and efficient.  “It is too early to judge what kind of an impact this will have on NRF members or the rest of the industry,” he said. “However, we believe it will be positive and hopefully improve the health of the overall industry. It is critical that the carriers communicate throughout this merger process with cargo owners, so that there is full visibility into how the new entity will operate beginning in 2018.”

THE Alliance. Rolf Habben Jansen, chief executive officer of Hapag-Lloyd – the fifth largest carrier worldwide and other very large member of THE Alliance once its acquisition of UASC is completed – said of the deal, “Consolidation is continuing, which is needed and will help the industry to recover and become more sustainable. The merged company will be a very strong and powerful partner in THE Alliance and we are very much looking forward to working together with them for many years to come.”  THE Alliance will compete with two other major groupings of carriers – the OCEAN Alliance of CMA CGM, COSCO Container Lines, Evergreen, and OOCL, and the 2M Alliance of Maersk and MSC. South Korea’s Hyundai Merchant Marine, who was also a bidder in the sale of compatriot line Hanjin’s transpacific network, has signed a memorandum of understanding to join the 2M, but negotiations have yet to be finalized.  Jensen said he believes that all things being equal, the joint venture “should make it easier for THE Alliance to function…It’s very clear to me that the priority of the Japanese carriers is to get the alliance network up and running, which is why they won’t do the joint venture until mid-2017 anyway and then look at a joint venture network from beginning of 2018, because otherwise they would delay the implementation of THE Alliance. That takes overarching priority.”

About a week after the Big 3 announced their intentions, THE Alliance released information about its planned service network. The carriers plan to offer 31 services in the major east-west trades, including 16 loops in the transpacific trade, six in the transatlantic, five between Asia and North Europe, three between Asia and the Mediterranean, and one between Asia and the Middle East.  The trade between Asia and the U.S. and Canada seems to be a particular area of concentration: 11 of the transpacific loops will call at ports in the Pacific Southwest, three to the Pacific Northwest, and five to the East Coast – with three loops transiting the Panama Canal and two using the Suez Canal.

Jensen noted that in contrast to the OCEAN Alliance, which laid out its port rotations in a very detailed way, THE Alliance had many “placeholder” calls when it made its announcement. Instead of stating a ship would stop at Seattle-Tacoma, Vancouver or Prince Rupert, for example, it said “Pacific Northwest.” Similarly, the tentative rotations were peppered with calls like “West Med hub” or “South East Asia Hub.”  “That tells me they are not completely done yet,” said Jensen. “They have the skeleton, the framework, in place but they are not quite done yet. But given that the OCEAN Alliance came out with their network, they had no choice but to go public ASAP because some shippers are beginning contract negotiations already.”

More M&A To Come? There is speculation among industry analysts that there could be further merger and acquisition activity or changes in alliances yet to come.  Drewry noted there is a “clear divide that is emerging with the leading seven carriers (Maersk, MSC, CMA CGM, COSCO, the three Japanese carriers, Hapag-Lloyd and Evergreen) breaking away from the likes of OOCL, Yang Ming, Hamburg Süd, HMM and ZIM.  “All, bar Evergreen, of the Top 7 will be at least twice the size of the next rung of carriers when all the new orders are delivered,” it said.

Visser believes there is a chance HMM could still end up being part of THE Alliance, despite the memorandum of understanding with the 2M Alliance.  In regards to consolidation between Taiwanese carriers Yang Ming and Evergreen, Visser said, “I don’t think that under the present circumstances, the 33.3 percent government share in Yang Ming would represent a problem, but yet, to my feeling, Evergreen/Wan Hai would be closer to each other than Evergreen to Yang Ming.”  An article in the Journal of Commerce in November quoted Bronson Hsieh, the chairman of Yang Ming, as firmly refuting the notion that his firm might merge with Evergreen.

Visser also said it’s worth keeping an eye on Hamburg Süd, especially in the wake of the forthcoming UASC merger into Hapag-Lloyd, noting the carrier’s cooperative slot sharing agreements with UASC. “Since a while, Hamburg Süd and UASC are rendering each other access to the east-west and north-south trades, respectively, and joining Hapag-Lloyd, at last, would be the only means for Hamburg Süd to keep this,” he said.

However, others say that Hapag-Lloyd’s acquisition of Chile’s CSAV – like Hamburg Süd, a powerhouse in the Latin America trade – has made such a merger unnecessary. They also say a merger between Hapag-Lloyd and Hamburg Süd might run afoul of regulators because it would be too dominant in the South American market.