Editor's Note: This article is part of a series on the supply chain effects of changes to the ocean freight industry. All stories in this series can be found here.
Rampant consolidation within the ocean freight industry is hardly new, but over the past few months, supply chains suffered a host of side effects from the carriers’ consolidation.
Most notably, in April the industry reorganized into three major alliances to improve vessel utilization on East-West trades. As a result, ports were forced to adjust to handle changes in import and export, leading to congestion at various terminals around the world. These incidents highlight the industry’s role in assuring smooth supply chains, and the fickle nature of logistics.
“I think people have the right to be somewhat concerned. This is not the first time the alliances have changed,” Sri Laxmana, director of ocean services at C.H. Robinson, told Supply Chain Dive in an April conversation. “It is definitely not the last time the alliances will change.”
Consolidation also means higher prices for shippers and higher cost savings for carriers. Yet, because the shipping industry has endured so much disruption in the past year, it still isn't clear how the consolidation will affect the market long-term as the industry continues to its new configuration. For now, alliances appear to be helping members raise rates, and improve confidence in the industry.
Below are some of the top stories since the alliances began April, delving into these trends:
The three major alliances' new services are officially underway, but shippers worry customer service will suffer as ports and carriers transition to a new system. Read More >>
THE Alliance, the OCEAN Alliance and 2M demonstrate strength in numbers when it comes to pushing through rate increases. Read More >>
Congestion strikes the Shanghai port of Yangshan as the port adjusts to handle larger vessels and shippers rush to avoid rate increases. Read More >>
Port congestion is spreading from Shanghai to other ports in the U.S. and China, as dockworkers adjust to new processes and alliances. Read More >>
New alliances led to greater April volumes at the Port of Long Beach, raising questions as to whether ports are prepared to handle the implications. Read More >>