Maersk, Hapag-Lloyd Form Shipping Alliance -- Update

By Dominic Chopping

Danish shipping giant A.P. Moeller-Maersk and Germany's Hapag-Lloyd are teaming up to form a new vessel-sharing agreement from next year as the companies move to combat mounting challenges for the industry.

Following the end to the pandemic-fueled cargo boom, when freight demand outstripped the supply of ships, the industry has been left with a surplus of vessels and sharply lower freight rates, while the recent escalation of hostilities in the Middle East has forced shippers to divert their vessels by thousands of miles.

The long-term deal announced Wednesday--dubbed Gemini Cooperation--seeks to boost efficiencies and help accelerate the companies' decarbonization efforts by delivering a flexible and interconnected ocean network, they said.

A fleet pool of around 290 vessels will be used in the collaboration, offering a combined capacity of 3.4 million containers, with Maersk deploying 60% of the ships and Hapag-Lloyd 40%.

Maersk has a total fleet of around 740 vessels while Hapag-Lloyd has 264.

As a result of the agreement, Hapag-Lloyd will leave the THE Alliance that it currently participates in with Korea's HMM, Singapore's Ocean Network Express and Taiwan's Yang Ming at the end of January 2025, it said.

Maersk previously said that its 2M alliance with Mediterranean Shipping Company would end in January 2025.

Write to Dominic Chopping at [e-mail]

(END) Dow Jones Newswires

January 17, 2024 05:22 ET (10:22 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.