Tough times drive shippers into 'uneasy' pacts

Maersk Kenya Ltd truck at Keitt Exporters Ltd in Nairobi. [File, Standard]

The global shipping industry is experiencing major disruptions that are driving competitors to partner in order to survive.

The two biggest shipping lines in the world which are also competitors - A.P. Moller Maersk and Hapag-Lloyd AG - have now partnered to create an entity called the Gemini Cooperation that will ply African routes especially round the Cape of Good Hope in South Africa. The Suez Canal in Egypt has become difficult to pass due to attacks from the Houthi rebels.

The Gemini Cooperation, set to officially launch in February 2025, will create a vast network of nearly 300 vessels with a capacity exceeding 3 million TEU, aiming for over 90 per cent schedule reliability.

The Gemini Cooperation Agreement allows Maersk A/S and Hapag-Lloyd AG and Hapag-Lloyd USA, LLC to share vessels.

Kenya's Mombasa Port is one of the major hubs that the Gemini Cooperation will operate in. Maersk and Hapag Lloyd are major shipping lines that dominate business at the port.

The other major line is the Mediterranean Shipping Company. The plan by the two lines while forming Gemini is hinged on the need to share diminishing resources and save on costs especially in African ports.

Since the two companies unveiled the new long-term collaboration in January this year, they have been working on finalising the details of the operational collaboration which covers a joint ocean freight network on East-West trades.

With around five months to launch in February 2025, Maersk and Hapag-Lloyd are now ready to share an update covering finalised service maps and how the network has evolved since the announcement in January 2024.

Additionally, the companies are also presenting an alternative Cape of Good Hope network due to the ongoing disruptions in the Red Sea.

“Reliability, connectivity and sustainability are the keywords in the networks we are presenting today, and we are pleased that we now can give our customers full transparency about how we will deliver a best-in-class ocean network so they can begin planning despite a highly dynamic situation,” said Rolf Habben Jansen, CEO Hapag-Lloyd.

In October this year, the Gemini Cooperation will announce which network it expects to put to sea in February 2025.

“We are looking forward to the launch of our completely redesigned network next year, and we are happy to reconfirm that our schedule reliability target remains unchanged irrespective of which network we will phase in. We believe our collaboration will raise the bar for reliability to the benefit of our customers and set a new and very high standard in the industry,” said Vincent Clerc, CEO Maersk.

The new network consists of either 27 or 29 efficient ocean mainliner services supported by an extensive network of 30 agile, intraregional shuttle services.

According to the plan, the trans-Suez network will have about 300 vessels with a capacity of 3.4 million twenty foot equivalent units (Teus). It will have 57 services (27 mainliners, 30 shuttles).

The Cape of Good Hope network will have about 340 vessels with a capacity of 3.7 million Teus or 59 services (29 mainliners, 30 shuttles).

A.P. Moller - Maersk (Maersk) is an integrated logistics company. The company operates in more than 130 countries and employs around 100,000 people world-wide.

Maersk has a fleet consisting of around 700 owned and chartered vessels with a total capacity of more than 4 million TEU.

With a fleet of 287 modern container ships and a total transport capacity of 2.2 million Teus, Hapag-Lloyd is one of the world’s leading liner shipping companies.

In the liner shipping segment, the company has around 13,700 employees and 400 offices in 140 countries. Hapag-Lloyd has a container capacity of 3.2 million Teus.

A total of 114 liner services worldwide ensure fast and reliable connections between more than 600 ports on all the continents. In the Terminal and Infrastructure segment, Hapag-Lloyd has equity stakes in 20 terminals in Europe, Latin America, the United States, India and North Africa.

Around 2,900 employees are assigned to the Terminal and Infrastructure segment and provide complementary logistics services at selected locations in addition to the terminal activities.