b'8American Journal ofTransportation ajot.com(FUTUREcontinued fromButunliketheknot,theLloyd has a lot at stake with thewe are going to cover the addi- aweek,ratherthantwiceand page 2) agreementisntaunionofnew agreement.tional ports with the shuttle ser- thus the calls will have the nec-MSC and Maersk, it is easy toequals as Maersk is significantlyOne thing both carriers arevices, with one small note thereessary critical mass to avoid see that their approach to con- largerthanHapagLloydandlooking to do is deliver sched- that of course in US we cannotblank sailings.tainership business is different.this reflected in the operationalule reliability.use the hub-and-spoke concept. The key aspect of the Hub Maerskhasembracedthestructureasthenewcoopera- AstheannouncementlaidTheUSservicesaretheandSpokesystemforGemini role of building a logistics verti- tionbetweenHapag-Lloydandout, As a part of the agreement,exceptionbecausetheJonesisasSilvapointsout,Were cal,nottoodifferentconceptu- Maerskwillcompriseafleetthe two companies have set theAct forbids foreign flag carriersgoingtohaveabout12main allyfromthemega-integratorspool of around 290 vessels with aambitioustargetofdeliveringfrom cargo carriage between UShubs globally Out of those 12 like UPS or FedEx. The differ- combined capacity of 3.4 millionschedulereliabilityofaboveportsaforeignflagcarriermain hubs, we actuallycon-ence with the former is that theircontainers(TEU);Maerskwill90% once the network is fullycan load and discharge but nottrol the 10 of them.cores are differentUPS withdeploy60%andHapag-Lloydphased in. As well as improvedloadanddischargeUSfreightAs in any marriage of con-its trucking core and FedEx with40%. Collectively, the two carri- servicequality,customerswillbetween US ports. venience, the question of whether itsairfreight.Maerskscoreisers control 964 vessels of aroundalso benefit from improved tran- Whileshippersmayhavethe interest of both parties will clearlyitscontainershipopera- 6.5 million TEU, so the Geminisittimesinmanymajorport- doubtthattheHubandSpokeremain the same over the long-tions, but the company is buildingarrangement accounts for aroundto-portcorridorsandaccesstoconceptwillworkasplannedtermisanopenquestion.But outalogisticsbusinessaround30%ofthecombinedfleetbutsomeoftheworldsbestcon- Silvasays,Butifyoulookgiventhenumberofvessels this central activity. And there are54% of the TEUthis trans- nected ocean hubs. atAsia,Europe,MiddleEast,availableespecially to Maersk some noticeable shifts that havelates into larger line haul vesselsPedro Silva, Hapag Lloydsall the trades that are involved leaves considerable room to come with the implementation offor the Gemini pact. SeniorVPSalesfortheUS,intheGeminiCooperation,operate outside the parameters of the new business philosophy.AsthepercentageimpliessaidattheCoalitionofNewthemainlineswillreducethethe alliance. Flexibility that may Formanyyears,itwasMaersks share of the deploymentEnglandCompaniesforTradenumberofthemainlinerportbenefit both Maersk and Hapag importanttoMaersktobetheamounts to 174 ships or around&TransportationConferencecalls to reduce risk and prioritizeLloyd in the future. number one containership oper- 25%oftheirfleetwhileHapag(CONECT) on April 10th, andon-time delivery. From a cover-ator.JustaseconomyofscaleLloyds contribution is estimatedexplainedthelogicbehindtheagestandpoint,wereactually1mA nA lliAnce ofo ne ?has been the primary motivationat 116 vessels or 42% of their totalGeminiCooperationalliance,going to offer more connectionsSo where does this Maersk-behind building ever larger con- fleet. For Maersk, this means theyOur vision is with the Geminithan we have today. HapagLloydunionleavethe tainershipshaving more (andwillhave512vesselsavailableCooperation,weregoingtoOnthesubjectofblanknumber one containership oper-larger)containershipsenablesoutsidetheGeminiagreementhave on the main liners reducedsailings [when a scheduled shipator MSC? In the drivers seat. anoceancarriertoefficientlywhile Hapag Lloyd will have 162number of port calls, usually twodoesnt call a port] Silva saysMSC currently has 807 ships manageanextensiveintercon- vessels operating separately fromor three, no more than three onthat they will try to avoid them(FUTUREcontinued on nectednetworkofvesselrota- theagreement.ClearlyHapagorigin and destination. And thenbyreducingthecallstooncepage 10)tions.Butthetopspotonthe container ship operator list now belongstoMSC,withnumber two Maersk over a million TEU behind. And Maersk could slip further down the list of top con-tainershipoperatorsoverthe next decadeor even sooner. MSC, which as the worlds largestcontainershipoperator already deploys over 5.7 million TEU, has over another 1.3 mil-lion TEU on the orderbookso it is highly unlikely to relinquish the top spot anytime soon. And numberthreeCMACGMhas 1.1millionTEUofshipson order while the number four car-rier COSCO has nearly 800,000 TEU on order. Both of these car-riers are nipping at the heels of Maerskandconceivablyboth couldovertakeMaerskinthe next few years.But for Maersk their TEU rankingisntasimportanta goalasbuildingacomprehen-sive logistics structure that can producereturnstoflattenthe income troughs the ocean ship-ping industry so often slips into. This isnt to say that other carriersarentlookingtoadd more logistics services to their toolbox.Manyaredoingjust that for much the same reason. Forexample,theCMACGM GroupincludesCEVALogis-tics and CMA CGM Air Cargo, whileMSC,themostcarrier centric operator, also has its own MSCAirCargoservice.(see Stuart Todd, Do ocean carriers have a future in airfreight? page 32)ThedifferenceisMaersk isnt simply adding another tool to the toolbox but rather build-ingabrandnewtoolbox.The question is in a copycat business like ocean shipping, will others follow Maersks lead?g emini : T woP eAs in AP onD ?BackinJanuaryofthis year, Maersk and Hapag Lloyd announced they had signed for a long-term operational collabo-ration,theGeminiCoopera-tion agreement with the goal of delivering a flexible and inter-connected ocean network. For theannouncementanewlogo of a figure eight knot consisting of blue and orange intertwined rope was unveiled.'