FMC Delays Gemini Alliance

The US Federal Maritime Commission (FMC) has delayed the approval of the Gemini Cooperation, an operational partnership between Maersk and Hapag-Lloyd, pending further information from the two carriers.

The FMC move, announced on July 12, comes as the commission seeks additional details to fully assess the competitive impacts of the proposed alliance.

The Gemini Alliance
The Gemini Cooperation, announced in January, aims to enhance reliability and consistency in container services through a hub-and-spoke model, designed to offer shippers 90% schedule reliability and consistent weekly services without the need to blank or cancel voyages.

The mainline network, operating out of 12 container terminals controlled by the two carriers, will be supplemented by feeder vessels, solely supplied by Maersk. These feeder vessels will bring freight from smaller ports, integrating into the larger network to ensure capacity utilisation.

FMC’s Request for Additional Information
The FMC’s decision to delay the agreement stems from a need for more detailed information to analyse the alliance’s competitive impacts. The information requested by the FMC is commercially sensitive and will not be made public. The commission has 45 days to review the Gemini agreement for competitive and legal concerns once it receives a fully compliant response.

The initial filing by Maersk and Hapag-Lloyd in May outlined their intention to cooperate on services between Asia, the Middle East, the US Pacific Coast, the US Atlantic and Gulf Coasts, and Europe. The wide-ranging agreement allows for flexibility in vessel deployment and substitution between the two parties.

Conclusion
Maersk, in a statement to the Journal of Commerce, indicated that the FMC request is standard and should not impact the planned February 2025 operational start of the alliance.

The formation of the Gemini Cooperation, between Hapag-Lloyd and Maersk brings together 290 vessels and a combined capacity of 3.4m TEU, with a network comprising 26 mainline services and seven trades.

OCEAN Alliance has made public its intention to extend operational cooperation until at least 2032, leaving the remaining members of THE Alliance in a conundrum as they are losing Hapag-Lloyd – the biggest carrier in the group.

The Gemini alliance, once operational, will position Maersk and Hapag-Lloyd with a combined capacity of 6 million TEUs, surpassing MSC’s standalone capacity of 5.6 million TEUs.

We continue to leverage our global carrier relationships, to understand their strategies, service priorities and fleet deployments.

Understanding how the carriers plan to operate through 2024 and into 2025, as the alliances evolve, ensures that we can negotiate the contracts that will get our shippers the best deals for space, service and price