Shippers are requiring assurance from shipping alliances that they have strategies in place in case a member is unable to deliver its cargo, reported JOC.com
Following the bankruptcy of Hanjin Shipping and the subsequent crisis involving its estimated half a million stranded containers, shippers state it is necessary for alliance members to provide assurance they have contigency measures in place.
Earlier in May, 2016, the Federal Maritime Commission released a report stating that the restructuring of the ocean carrier alliance system, if not carefull monitored and regulated, could reduce services for shippers.
Alliances between shipping companies have been used as a tool to reduce the risk of individual companies going under in the shipping crisis, but it unknown if these alliances include support, financial or otherwise, if one of the partners is to liquidate.
Technical Paper: Shipping Mega Alliances Impacts Ports and Terminals
Mario Cordero, Chairman of the Federal Maritime Commission, said of shipping alliances in May: “At the end of the day, alliances are supposed to benefit the shipper by providing increased choices, increased competition and increased efficiencies.
“With the number of ocean carriers decreasing through merger and acquisition activity, and alliances restructuring themselves into larger entities, it is not unreasonable to ask, ‘is the shipper really going to benefit?”
In a statement recently, Cordero said that the Federal Maritime Commission aims to reduce the risk of disruption for shippers by investigating alliances and their effect on the supply chain, however more personnel are needed to preform this task to maximum efficiency.
The proposed carrier grouping THE Alliance was put at a disadvantage by the Hanjin Shipping bankruptcy to its rivals; at the end of September, 2016 PTI reported they were considering a replacement.
