b'4American Journal ofTransportation ajot.comThe tripartite of ocean carrier alliancesFour corners of the containerface multitude of challenges By George Lauriat, AJOTThe ocean carrier alliances control over 80% of the trade. But challenges bothItsallaboutthecon- unpredictablewatersofthe from ongoing supply chain disruptions and a new regulatory agenda couldtainer. In a sense the ship, theoff-again, on-again disrupted truck and even trains are justsupply chain.alter the way alliances operate. interchangeable pieces of theIn an interview with AJOT, delivery systemitsreallyTuthillwasaskedwithso By George Lauriat, AJOT all about getting the containermany unpredictable elements fromfactorytowarehouselikeCOVID-19instigated Until recently, most com- TheSouthKoreancarriersfrom this basis that slices ofandbackagainforreload- lockdowns and reopenings in mentatorsfromoutsidethe$10 billion bankruptcy shookthe cargo pie are divided. Asing. A simple concept for anChinaandnowtheUkraine industryhadneverheardtheindustrylikenootheran industry veteran that heldinherently complex business. Warandtradebans,how ofshippingalliances.Theirfailure before it. There was aexecutivepositionswithaGregTuthill,thechiefcan a shipper or carrier keep namesrarelyevokedastir.realization that no ocean car- number of containership car- commercialofficeratSea- their containers working, cir-Butlikemanyotherthingsrier was too big to fail. Andriers,GregTuthill,nowtheCube,aNewJersey-basedculatingintheirnetworks? that have occurred since thetheHanjinbankruptcytrig- chiefcommercialofficeratcontainerleasingcompany,Tuthills take on the problem COVID-19 pandemic began,gered a massive consolidationSeaCube, a container leasingknowshiswayaroundtheis to try and get ahead of the so has a recognition of globalof ocean carriers and in turn acompanyexplained,Itsallcontainer.Tuthill,besidessituation before it is a prob-shipping alliances. After all,parallelconsolidationwithinbased on the basic slot agree- workingonthecontainerlem,One,Ithinkpeople the real structure of the globalthe ocean carrier alliances.ment,whichistiedtohowleasingsideofthebusinessforgetthattheyneedtobe supply chain is built aroundmany assets you put into theessentiallyasupplierofproactiveandnotreactive. these ocean carrier alliances. S liceS of aP ie alliance.Thewayitsparti- containers,hasworkedforGetting ahead of it, whether And there are just three Thefeaturethatmakestionistypicallybasedisonanumberofoceancarriersitsseasonality,ortryingto a tripartite of carrier alliancestheoceancarrieralliancehowmuchtonnageyouareduring his career, giving himhave contingency, or makingthat wield enormous powerworkisthecontributionofcontributing to the alliance a nuanced view of the chal- sure that they have looked a over the global movement ofships and slots that each car- (ALLIANCEScontinuedlengesfacingbothcarriers(CORNERScontinued on goods. Collectively, the threerier makes to the alliance. It ison page 6) andshipperstraversingthepage 18)alliance, the 2M, Ocean Alli-ance, and THE Alliance, con-trol over 3,000 ships and 21 millionTEUaccountingfor over50%oftheoperating containership fleet and a stag-gering 82% of the TEU slots (See Alliance Chart on page 9). Put another way, nine out of the top ten ocean carriers areinanalliance(seeTOP 50 chart on page 8). And the tenth, Zim Line, has an agree-mentwiththe2Mcarriers (Maersk and MSC).So, what does an alliance do? A succinct answer might be the alliances organize ship movements.Inasense,the realstructureoftheglobal supplychainresidesintheSustainabilityocean carrier alliances. From an organizational per-spective, it is the service sched- Is Our Businessules of the various steamship lineswithinthebigthree oceancarrieralliancesthat providetheframeworkfor the global supply chain. Such collaborationbetweenocean carriersisntnew.Insome ways,thenewgenerationof shipping alliances is the suc-cessor to the shipping confer-ence system of the 1880s.But an agreement to collaborate of space and other backroom ser-vices doesnt extend to freight ratesanimportantdistinc-tionwhenitcomestoanti-trustregulatoryissues.And upuntilfairlyrecently,car-rier alliances didnt wield the same commercial power they do today and didnt attract the same level of scrutiny. Not to saytherewerentinvestiga-tions,therewere.Butwith somuchcompetitionamong the ocean carriers, the debateFood Waste MitigationwasmoreoverincidentsofSustainable Reefer Low GWP Through Leading EdgeBamboo Container abuseratherthananeedtoTechnology Refrigerants Technologies Flooringoverhaul the entire ocean car-riage system. The ocean car-rierssimplywerentmakingIts not just the boxmoney and competition forits our approach to offering sustainable fleet solutions bundledSeaCubefreight was ferociousputtingwith leading edge technology that makes the difference. C O N T A I N E R L E A S I N Gto rest any anti-competitive considerations.Visit www.seacubecontainers.com to learn more. seacubecontainers.comThat all changed with the Hanjinbankruptcyin2017. BSYA-SeaCube Sustainability AJOC 8x10.indd 1 3/30/22 11:20 PM'