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Hapag-Lloyd, Maersk join forces in deal covering 3.4 million containers

Published 01/17/2024, 04:16 AM
Updated 01/17/2024, 11:41 AM
© Reuters. Hapag-Lloyd sign on a container ship is pictured at the Valparaiso port, Chile, January 11, 2024. REUTERS/Rodrigo Garrido/File Photo

By Vera Eckert

FRANKFURT (Reuters) -Hapag-Lloyd and Maersk have signed an agreement for a new long-term collaboration as they strive to transport a combined 3.4 million containers (TEU) via 290 vessels more reliably and sustainably, the two shipping companies said on Wednesday.

As part of the so-called Gemini Cooperation which starts in February 2025, the pair have set an ambitious target of delivering schedule reliability of above 90% once the network is fully phased in, they said.

The average schedule reliability of leading container carriers dropped from 68.5 percent in January 2020 to 30.4 percent in January 2022, according to data platform Statista.

Rolf Habben Jansen, chief executive of Hapag-Lloyd, said his company would benefit from efficiency gains in operations and joint efforts to accelerate the decarbonisation of the wider industry.

His Maersk counterpart, Vincent Clerc, said the deal will strengthen integrated logistics offerings and make services more reliable.

The shared pool, involving the world's fifth- and second-largest container ship operators respectively, will consist of 290 vessels of which Maersk will deploy 60% and Hapag-Lloyd 40%.

The current arrangement of operational responses to attacks on ships in the Red Sea by Iranian-backed Houthi militants in Yemen was not a factor in the deal, Habben Jansen said in a call with reporters.

As a consequence of the agreement, Hapag-Lloyd will leave the shipping alliance called THE Alliance at the end of January 2025, which it shares with three merged Japanese lines called Ocean Network Express (ONE), YangMing of Taiwan and South Korean HHM, formerly known as Hyundai (OTC:HYMTF) Merchant Marine.

Maersk a year ago said it would end its alliance, called 2M, with rival MSC.

Hapag shares were down 1.1% while Maersk shares gained 2% in the late afternoon.

"GOOD FIT"

Habben Jansen said that the two companies are a good fit as their business strategy emphasises reliability - which has become crucial for customers since the COVID-19 crisis upset supply logistics and drove up freight rates.

For Hapag-Lloyd, one partner rather than three would be simpler.

No further partners would be sought in the deal.

The agreement will be subject to filing with regulatory authorities in various geographies over the next few months, but has good prospects of it being passed in the third quarter, Habben Jansen said.

"We believe what we have decided as a cooperation is fully compliant with the existing frameworks," he said.

Both firms have also declared decarbonisation strategies.

Maersk is aiming for net-zero operations in 2040 and Hapag-Lloyd in 2045.

The structure was designed to be more open than in an alliance arrangement, Habben Jansen said.

"The spirit of the (Gemini) cooperation is that we should not keep each other handcuffed, but both be able to execute our own strategy," he said.

© Reuters. Hapag-Lloyd sign on a container ship is pictured at the Valparaiso port, Chile, January 11, 2024. REUTERS/Rodrigo Garrido/File Photo

Michael Kruse, a Hamburg member of the federal parliament in Berlin and port specialist in the Liberal Free Democratic Party (FDP's) parliamentary faction, said Hamburg was likely to be weakened if the alliance rearranged traffic around European ports.

MSC bought almost half of Hamburg port operator HHLA in a deal with the local Hamburg government last year, which shook up the local business scene in which Hapag-Lloyd is influential.

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