The addition of Evergreen to the CKYH alliance (Cosco,
"K" Line, Yang Ming, Hanjin) will enlarge the average size of ships the vessel-sharing agreement will be able to operate in the Asia-Europe trade, but expansion of the alliance to include China Shipping or United Arab Shipping Corp. (UASC) would narrow the economy of scale advantage the P3 alliance will have over its competitors, said the consultant SeaIntel in the current issue of its Sunday Spotlight
Copenhagen-based SeaIntel said the current average vessel size in CKYH’s Asia-Europe network is approximately 9,050 TEU.
"By taking port restrictions and other limitations into account and assuming that the carriers will deploy their largest vessels in the trade, SeaIntel finds that the CKYHE Alliance can increase their average vessel size in the trade to nearly 9,900 TEU," said SeaIntel.
SeaIntel, said that "in comparison, the P3 carriers’ average vessel size in the trade could be 12,200 TEU if they deploy their largest vessels in the trade." The proposed P3 alliance includes the three largest container carriers in the world — Maersk, MSC and CMA CGM.
As new, larger ships are added to the fleets of the CKYHE carriers, the average size of their ships on the Asia-Europe trade will grow
to 11,050 TEU by the end of 2015, but SeaIntel said if either China Shipping or UASC or both join the CKYHE alliance on Asia-Europe, "it will have a positive impact on the alliance’s average vessel size in the trade from day one; but most importantly, it will be very beneficial for the alliance from a long-term perspective, as both carriers have a large number of +10,000-TEU vessels in their orderbooks." If both China Shipping and UASC were members of the CKYHE, the average size of ships the seven carriers would operate in the Asia-Europe trade would climb from 10,300 TEU in the second and third quarter of this year to 12,050 TEU at the end of 2015, SeaIntel said.
Earlier this month, Cosco and China Shipping signed a cooperation pact, and Alan Murphy, chief operating officer and a partner at SeaIntel, said the agreement "should most likely be seen as a partial step toward a potential merger. However, the agreement does not constitute merger talks, but it represents a solid step towards becoming a consolidated Chinese container carrier, if we only focus on the container units. Further, the CKYHE Alliance’s economy of scale would also be improved, if CSCL joins the alliance, which we believe is very likely. The question is whether UASC will also join the alliance in the future. It has been confirmed by several media sources that discussions have been ongoing between the Arabian carrier and the alliance, and we believe that both parties would benefit from a possible agreement."