By A group of major shipping lines from Asia and Europe, including China’s Cosco Shipping, French CMA CGM, and Taiwan’s Evergreen, have decided to extend their vessel-sharing agreement amid ongoing challenges in the freight market.
Market Challenges and Extension of Agreement
The Ocean Alliance, formed in 2017 with members such as Hong Kong-based Orient Overseas Container Line, was initially set to end in 2027. However, due to the current market conditions characterized by overcapacity and low freight rates, the companies have agreed to prolong the deal for an additional five years until 2032.
Impact of Recent Events
Following a surge in new vessel launches post-pandemic and recent attacks on merchant vessels in the Red Sea, the shipping industry has been facing increased complexities. Shippers have had to divert their vessels over long distances, resulting in higher fuel costs and a rise in freight rates.
Ensuring Service Stability
Despite these challenges, the extension of the alliance aims to ensure a stable and reliable service for customers. By working together, the companies believe they can offer broader geographic coverage while keeping costs under control.
Commitment to Customers
In a statement regarding the agreement extension, CMA CGM Chief Executive Rodolphe Saade emphasized the companies’ dedication to meeting customer needs and building secure, reliable, and sustainable supply chains.
This decision reflects the collaborative effort of leading shipping lines to adapt to market conditions and provide consistent service quality for their clients.
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