New Asia shipping alliances reshape trade

Container shipping is undergoing a major transformation this month, with the launch of new alliances, including the debut of the Gemini Cooperation, a joint venture between Maersk and Hapag-Lloyd, which seeks to redefine operational and schedule reliability.

Previously, major container carriers were organised into three major alliances: Ocean Alliance, THE Alliance, and 2M. These alliances followed traditional port-to-port network structures, with varying degrees of schedule reliability and operational efficiency. The new structure sees significant reshuffling:

• Ocean Alliance expands to 5 million TEUs, maintaining its dominance in the market.
• Gemini Cooperation emerges as a new force with 3.7 million TEUs, promising a radical shift in reliability.
• Premier Alliance (formerly THE Alliance, minus Hapag-Lloyd) is projected to reach around 3 million TEUs, supported by ONE’s extensive new-building programme.
• MSC has opted for an independent strategy, expected to deploy at least 3 million TEUs on major East-West routes.

Despite these structural changes, fundamental geographic service patterns remain unchanged. A liner service between Asia and North Europe, for example, still requires 10-11 ships for a weekly schedule via Suez or 12-13 ships via the Cape of Good Hope. However, where capacity becomes critical is in its impact on freight rates and carrier market share.

Gemini’s schedule reliability target

One of Gemini Cooperation’s most ambitious promises is to exceed 90% schedule reliability – a significant leap from the industry’s 2024 average of 50-55%. The Gemini model is designed to reverse this trend by creating a more predictable shipping experience, with its hub-and-spoke model.

Unlike traditional shipping alliances, Gemini Cooperation is pioneering a hub-and-spoke network to enhance schedule reliability. At the heart of this system is the Port of Tanjung Pelepas (PTP), which will serve as the primary hub for 20 Gemini strings and all seven of its Asia-Europe services. This centralisation aims to streamline operations and reduce delays by improving transshipment efficiency.

Key aspects of Gemini’s operation include:

• Unified control over hubs: All major hubs in the network are jointly controlled and managed by Gemini partners, ensuring greater operational consistency.
• Standardised scheduling: By minimising schedule variability at transshipment hubs, Gemini reduces unpredictability in arrival times.
• Dedicated feeder services: The network incorporates regional shuttle services to key destination ports, allowing for more reliable last-mile delivery.

However, the effectiveness of this model hinges on PTP not getting congested and on the ability of third-party ports, such as London Gateway, to accommodate Gemini’s operations. Potential berthing restrictions or congestion at these ports could undermine network performance, mirroring past industry-wide disruptions.

Shippers’ willingness to pay a premium for reliability over cost savings will be key in determining Gemini’s success. While some shippers may value reduced inventory costs enabled by greater reliability, past efforts to introduce premium services struggled due to market fragmentation and price sensitivity.

With the majority of shippers valuing end-to-end reliability rather than just punctuality between hubs, the challenge for Gemini will be to demonstrate that its model can deliver comprehensive benefits across the entire supply chain.

Competitor responses and market evolution

While Gemini introduces a new operational model, other alliances continue to favour traditional port-to-port networks.

Ocean Alliance is refining its services, adding a seventh Far East to Europe route and incorporating the port of Yangpu in South China into two of its Asia-North America loops.

Premier Alliance retains most of the former THE Alliance services while securing slot agreements with MSC for Far East-Europe trade. Meanwhile, MSC’s independent approach allows for maximum flexibility in fleet deployment.

The effectiveness of these divergent strategies will become clearer in the coming months. 

If Gemini’s hub-and-spoke model succeeds in delivering superior reliability, it may prompt broader industry adoption. Conversely, if challenges arise, it could reinforce the dominance of traditional shipping alliances. As the industry navigates these changes, the long-term impact of these structural shifts will be closely watched.

As the container shipping industry enters a new phase of competition and service differentiation Noatum Logistics provides shippers with more choices than ever, with more port pairs, service choices and network flexibility.

With over 90 offices in 25 countries we offer end-to-end logistics support and seamless communication from origin to destination. Secure and adaptable ocean freight solutions that meet the challenges of a shifting market. 

Get in touch with our ocean team today and discover how we can optimise your supply chain for the future.