US consultancy firm AlixPartners has proposed that THE Alliance, which is predicted to be the weakest box shipping group after Hapag-Lloyd’s departure next year, should explore a partnership with MSC to maintain competitiveness.

Following the dissolution of the 2M Alliance, MSC will operate independently as Maersk aligns with Hapag to form the Gemini Cooperation in February next year. The remaining members of THE Alliance, namely ONE, HMM, and Yang Ming, will have a combined capacity of just 2.5m teu without Hapag, indicating a potential need for a new member to sustain competitiveness.

However, the possibility of any members from the Ocean Alliance (comprising CMA CGM, Cosco, and Evergreen) joining THE Alliance seems unlikely as they recently announced the extension of their cooperation until 2032.

AlixPartners, in its 2024 container shipping report, suggests that this unexpected announcement from the Ocean Alliance necessitates a strategic shift for the remaining members of THE Alliance or a potential Vessel Sharing Agreement (VSA) between THE Alliance and MSC.

If MSC remains independent, the reshuffling will result in four distinct cooperatives competing for volume on the critical head-haul trades, potentially acting as a brake on rate increases.

Linerlytica’s latest report, released today, states that the Ocean Alliance’s move solidifies its position as the largest container shipping alliance, with over 4m teu of capacity, giving it a significant lead over rivals on the transpacific and Asia-Europe routes.

Without Hapag-Lloyd, the Alliance would be the smallest of the four global carrier alliances. It will be fragile on the Asia-Europe and transatlantic routes, needing more capacity and market coverage to compete effectively.

Linerlytica analyst Tan Hua Joo suggests that THE Alliance is more likely to pursue slot arrangements on specific routes than a full-fledged alliance arrangement, particularly on the Asia-Europe/Mediterranean route, where they are most likely to seek new partners.

While THE Alliance members have declined to discuss external speculation, Yang Ming’s spokesperson has indicated that new arrangements will be announced in 2025.

MSC, which already has a VSA with Zim Line on the transpacific, Asia-Australasia, and North Europe-Mediterranean lanes, has yet to respond to requests for comment.

As Xeneta’s chief analyst, Peter Sand, aptly says, “Anything is possible, but it takes two to tango.”