ACL and H-L call it splits

 The fallout from the Maersk / Hapag-Lloyd "Gemini Cooperation" began earlier this year. As soon as the arrangement was announced H-L stated that they would be leaving THE Alliance effective early 2025. There was some fear that that the other partners, ONE, HMM and Yang Ming would not be able to survive the loss, but it has now been reported that MSC has stepped in. As the world's largest container line MSC can bring considerable stability to THE Alliance. (MSC had been party to the 2M Alliance with Maersk which will also expire). It is still possible that various lines will re-form into different arrangements, but it is now much less likely.

Atlantic Container Line has announced that it is withdrawing from the longstanding "reciprocal space charter and sailing agreement" with Hapag-Lloyd. Initially established in 1986 and renewed every ten years, the agreement saw ACL moving some of its ships to H-L's Montreal route for a time and even renaming them with "Express" names.

The G3 (third generation) ACL ship Atlantic Companion was renamed Companion Express from 1987 to 1994.

 There was lots of Hapag-Lloyd orange on deck as Atlantic Cartier arrived in Haifax and also on the Atlantic Compass:

Atlantic Concert carried the name Concert Express from 1987-1994.

In recent years H-L boxes (and the green United Arab Shipping Co's UASC boxes) have been fewer and fewer on ACL ships (at least from what can be seen on deck), so it is uncertain how severe a jolt this latest development will be for the Grimaldi-owned ACL. There is also talk that H-L may establish a new transatlantic service of its own calling in Saint John, NB. H-L and CP Rail (now CPKC) also have longstanding ties, so this may be a loss to Halifax which is served only by CN Rail.

 Maersk and Hapag-Lloyd will be establising feeder services as part of of their new network but ACL also has feeders to Gothenborg and between Liverpool and Dublin and Belfast. The shakeup may have more ramifications however, but that is purely speculation at this point.

You can play "Where's Waldo" trying to spot the Hapag-Lloyd and UASC containers on the Atlantic Sky at PSA Fairview Cove yesterday, September 20. 

.

Hapag-Maersk - Gemini Cooperation Agreement

 The plan for Maersk and Hapag-Lloyd to work together under the Gemini Cooperation Agreement has run aground - at least temporarily, but has not yet been written off as a total loss.

The lines' application to the United States Federal Maritime Commission was rejected July12. The regulator may review a revised submission with more information. Other major world regulators will also have to approve the plan before it can be implemented.

The Gemini Caooperation Agreement would see the two lines join forces when the current 2M Alliance of Maersk and MSC expires, and THE Alliance (Hapag-Lloyd, HMM, Yang Ming and ONE) expires, both in February 2025. However the Agreement was to take effect this week in order to allow for the necessary preliminary work.

The plan will see a major shakeup as the two former competitors withdraw from competing services and realign. Yesterday (July 14) the NYK Demeter sailed from Halifax with the usual large number of Hapag-Loyd, UASC and CSAV boxes. The ship operates for THE Alliance, as  NYK Line is a partner in ONE (Ocean Network Express). The potential loss of Hapag-Lloyd related cargo may well see the collapse of THE Alliance as the other lines my find it difficult to maintain service.

With the ports of Halifax (and partner CN Rail) and Saint John (with the newly merged CPKC) vying for the realigned services, the fallout for Halifax may be quite significant. However to the credit of the FEC, the lines must show some benefit to customers, not just an improvement in their own operating ratios before regulatory approval is granted. 

.

Shake Up and Fall out

 The announcement on January 17, 2024 that Maersk A/S and Hapag-Lloyd AG have formed a 60/40 joint venture called Gemini Cooperation is the latest move to shake up the global container shipping business. The new entity, which will employ 290 ships with a capacity of 3.4 million TEU, will take effect in January 2025. It will operate a total of 26 main line services and more than 30 shuttle or feeder services world-wide. It is to be noted that this is not a corporate merger or acquistion (which would doubtless cause regulatory opposition), but a long term (others say four year) contract with performance terms for each partner. (Many mergers started with joint ventures however, so never say never). Reliability and environmental sustainability are two stated goals for the venture. [Container shipping companies have poor records for maintaining schedules, with a world-wide average of under 65% and an average 4.9 days late. For October 2023 Maersk was the most reliable at 71.1%, MSC was 68.5% and Hapag-Lloyd was well down the list sharing sixth place with COSCO at 60% on time.]

The effect of this development may be widespread as Hapag-Lloyd in particular will be making major adjustments. These will include changing principal ports (it will leave Hamburg in favour of Wilhelmshaven, Bremerhaven and Rotterdam as feeder hubs, even though the Port of Hamburg is a major stakeholder in the company.) The hub and spoke arrangement may favour larger and more central ports if they can overcome congestion issues.

More dramatic for Halifax, Hapag-Lloyd will also exit THE Alliance which leaves the other partners (ONE, Yang Ming and HMM) as Asia-only operators. Whether they will be able to find a new partner with European roots is questionable. Some analysts fear THE Alliance may not survive. Although H-L does not contribute ships to the services calling Halifax, its orange containers are prolific throughout the port, and the majority arrive on THE Alliance ships. 

Hapag-Lloyd has been an important customer in Halifax since the earliest days of containerization and before (although some if its business has been drained off recently to Saint John and CP Rail). Currently THE Alliance has two routes calling in Halifax, AL5 and EC5. Hapag-Lloyd has a slot charter deal with ZIM's ZCA transatlantic service and another with ACL, neither of which may be effected. 

 ZIM carries a lot of orange and green on deck.

Hapag-Lloyd also operates the weekly North Europe service "Montreal Express"from Antwerp, Liverpool, Le Havre and Bremerhaven to Montreal in conjunction with MSC and OOCL. Those ships normally do not call in Halifax.

Maersk announced a year ago that they would be leaving the 2M Alliance with MSC at the end of January 2025. Where that leaves MSC remains to be seen.

Maersk itself is a fairly minor player in Halifax, represented by their joint St-Lawrence River service with CMA CGM and possibly some M2 cargo on MSC ships. Nevertheless changing patterns may emerge when Hapag's THE Alliance cargo shifts to Gemini or to other carriers.

On paper,at least for now, Gemini will become the largest shipping line after Ocean Alliance (CMA CGM, Evergreen COSCO/OOCL) which carries about 28% of the world's container trade. Gemini will have about 23% (Maersk 15% and H-L 7%) while MSC has about 20%.

As a matter of record AP Moller-Maersk owns Maersk A/S. In turn, A.P.Moller-Maersk is majority owned by the Moller family and its investment foundation (53.78% by most accounts) with numerous shareholders and investment funds each with less than 10% holding. Hapag-Lloyd is owned 30% by Klaus-Michael Kuhne, 30% by Cia Sudamericana de Vapores (CSAV), 13.9% by the City of Hamburg, 12.3% by Qatar Holdings and a number of shareholders and investment funds, none exceeding 10%.

It is expected that other lines, outside of the current alliances, may pick up some of Hapag-Loyd's Halifax business. The most likely to do so are MSC and CMA CGM. both of which serve Halifax now.

No dramatic changes are expected soon. Since the Gemini arrangement does not take effect until a year from now, a more gradual process is expected. However mega mergers and combines in other industries (most notoriously railroads) have not been altogether smooth. Some short term pain is expected.

An entirely superficial analysis of the deck load on THE Alliance's recent callers indicates a significant proportion of Hapag-Lloyd and UASC boxes. (Hapag-Lloyd and the United Arab Shipping Company merged in 2017.) Some "heritage" boxes from previous acquisitions such as Nile Dutch (2021) can be spotted too.

Who will carry those boxes, or their contents, may have a significant impact on the number and size of ships calling in Halifax over the next year or more. Stay tuned.

 .

P-3 -One Step Closer, and HAPAG merges

Faced with a large over-capacity in container ships and the resulting depressed state of container shipping in general,  the world's three largest container lines Maersk (15% of trade), MSC (13%) and CMA/CGM (8%) decided last year to pool their ships into one service called the P3 Network. Longstanding competitors, the three lines desperately need to lower costs to survive, since they have ordered so many giant (but efficient) ships, with not enough cargo to carry. By inference of course they also want to drive smaller operators, with smaller (and less efficient) ships out of the market too.

To keep regulators happy the P-3 stated that they would still run their businesses independently, but only pool the ships. So far US regulators have approved the proposal, but only as it applies to US ports. China and the EU have yet to weigh in. The latter has a 30% market share cap on shipping consortia, which the P-3 likely exceeds. In fact it is nearly a 40% share, which would effectively be a monopoly by many definitions.

Three separate trade routes are involved: Asia-Europe (via Suez), Trans-Pacific and Trans-Atlantic. With the US approval it seems likely that changes will be made on the Atlantic before the full service comes into play sometime mid-year. This may well effect Halifax and Montreal.

Maersk currently serves Halifax and Montreal with a direct transatlantic service. The latter port is  inaccessible to the giant Maersk ships, but Halifax is.

Maersk Pembroke is one of the Maersk ships that serves Montreal westbound and Halifax eastbound on a weekly transatlantic service.

CMA/CGM did serve Halifax with its own ships, but has been using slots on Maersk ships for more than a year. (see photo above)

MSC Kyoto on the St.Lawrence last summer.

MSC operates a feeder service from Montreal and Saint John, NB to the Dominican Republic, which connects with other MSC world services.

Are bigger ships on the way for Halifax? Certainly the two container terminals are ready for larger ships, but will they come?

If they do, will they bite into the trans Atlantic services of other lines?

My guess:
ACL (Atlantic Container Line) - no, because the line carries significant RoRo cargo, and largely serves northern Europe.

Post-panama, US flag, APL Belgium leaving Halifax March 23, runs on the G6 Alliance service.

 G6 Alliance - maybe, even though G6 members HAPAG-Lloyd and APL use a significant number of post-Panamax ships they are still less efficient than the new P3 giants

Zim Tarragona at3500 TEU is considered to be a small and inefficient ship.

Zim - maybe, because they use smaller ships, which are considered to be inefficient in today's terms. The Port of Halifax's largest container customer has been in a vulnerable position for some time.

Several lesser players such as Nirint and Melfi - probably not since the call in Halifax en route southern Europe to Cuba.

Ottawa Express on the St.Lawrence last summer.

Meanwhile HAPAG-Lloyd has come one step closer to sealing its deal with the Chilean CSAV, wherein CSAV would become HAPAG's largest shareholder. The merger (some would say takeover of HAPAG) will also include financing for seven new 9300 TEU ships-not exactly the formula one would expect if they are trying to reduce capacity. It will however see the disposal or transfer of smaller ships.
The merger would also see HAPAG + CSAV become the fourth largest container line, edging ahead of CMA/CGM.

.

HS Beethoven - all may become clear- REVISED DECEMBER 5

When HS Beethoven arrived at dusk and in foggy, rainy, misty conditions on Monday December 2, it looked like a routine arrival, albeit the ship is not a regular caller.
The ship first appeared in Halifax on August 21, 2013 for Atlantic Container Line, as a substitute while regular ACL ships were in refit or under repair.    Monday's arrival was for Hapag-Lloyd, and again as a substitute on H-L's ATA Service, its traditional Transatlantic service between Europe and the North American east coast.
That it did nor leave on time on Tuesday was not particularly unusual because of high winds and heavy rain, which would have slowed unloading.
Now however we hear that there was an incident aboard involving the possible collapse of a container stack and the puncture of a fuel tank.
Repairs will take a considerable time, and the ship may well have be unloaded before it can sail again.
Updates will be posted when available.

HS Beethoven was built by Hanjin Heavy Industries of Busan, South Korea in 2002 as HS Voyager for Hansa Shipping of Germany - its current owners. It was renamed MSC Arizona in 2003 for a charter and then APL Italy in 2005 for a charter. It received its present name in 2009. It measures 50,243 gross tons and had a capacity of 4,350 TEU (500 refrigerated.)

DECEMBER 5

HS Beethoven at Fairview Cove this morning was still being unloaded. It does appear that the ship will have to be completely unloaded, and its cargo transferred to other ships.

HS Beethoven - all may become clear

When HS Beethovern arrived at dusk and in foggy, rainy, misty conditions on Monday December 2, it looked like a routine arrival, albeit the ship is not a regular caller.
The ship first appeared in Halifax on August 21, 2013 for Atlantic Container Line, as a substitute while regular ACL ships were in refit or under repair.    Monday's arrival was for Hapag-Lloyd, and again as a substitute on H-L's ATA Service, its traditional Transatlantic service between Europe and the North American east coast.
That it did nor leave on time on Tuesday was not particularly unusual because of high winds and heavy rain, which would have slowed unloading.
Now however we hear that there was an incident aboard involving the possible collapse of a container stack and the puncture of a fuel tank.
Repairs will take a considerable time, and the ship may well have be unloaded before it can sail again.
Updates will be posted when available. 

HS Beethoven was built by Hanjin Heavy Industries of Busan, South Korea in 2002 as HS Voyager for Hansa Shipping of Germany - its current owners. It was renamed MSC Arizona in 2003 for a charter and then APL Italy in 2005 for a charter. It received its present name in 2009. It measures 50,243 gross tons and had a capacity of 4,350 TEU (500 refrigerated0.

San Francisco Express - another big one

Hapag-Lloyd's second big post-Panamax ship arrived at dusk today. San Francisco Express is a sister to Busan Express which began calling last month. These ships manage to cram 6,750 TEU into a 300m x 40m hull. That works out to 75,590 gross tons and 85,400 deadweight. The ship was built in 2004 by Daewoo's Koje yard in South Korea.
Several OOOCL ships have been given Express names, and they are post-Panamax ships too, but slightly smaller in terms of carrying capacity.
These ships have been bumped from Asia/Med/Europe service by even larger ships, thus sustaining the trickle down theory. That theory is that the largest ships will always serve the Asia/Med/Europe service and will displace other ships that will then run transatlantic. All bets on this theory may be off in 2014 when the expanded Panama Canal opens.

E.R. Denmark arrives for Hapag-Lloyd

The post-Panamax container ship E.R. Denmark arrived this morning for Hapag-Lloyd. The 65,792 gross ton ship was built in 2002 by Samsung Shipbuilding and Heavy Industries of Koje for E.R. Schiffs of Germany. (E.R. orginally stood for Ernst Russ)
It was launched as E.R. Denmark, but immediately entered into a ten year charter to APL Lines and was renamed APL Denmark. APL (formerly American President Lines) is the Singapore based subsidiary of Neptune Orient Lines, and provides transPacific container services.
In July 2012, following completion of the charter, the ship was handed by to ER Schiffs and reverted to its original name. Its hull was obviously repainted, and is now a very deep inky blue, almost black.
The ship has a capacity of 5762 TEUS (656 refrigerated) and is typical of the post-Panamax ships operated by Hapag-Lloyd and OOCL on their service from the Far East to Halifax via the Mediterranean..

Vietnam - startlingly clean hull

Vietnam Express sailed this afternoon with a surprisingly clean hull. The ship must have just come out of the shipyard, because there was scarcely a mark on it. A few tug scuffs on the stern and a bit of wave action forward was it. A beautiful sight.
Despite its Hapag-Lloyd sounding name, the ship still displays its OOCL colours and banner. It is actually owned by Nissen Kaiun of Imabari, Japan. It is a post-Panamax ship of 66,462 gross tons, 5888 TEU (including 586 reefers) built in 2007 as OOCL Italy and renamed in 2010.
The re-naming to H-L pattern was apparently to give H-L some of its own presence in the joint service with OOCL,  since H-L is not contributing any post-Panamax ships to the rotation.

Halifax Express - first visit with new name

1. Halifax Express passes west of George's Island inbound.

2. The ship's name appears in Greek on the stern.

Halifax Express arrived this morning for Hapag-Lloyd for the first time with that name. Until January 1 the ship had carried the name New York Express, but was renamed to free up the name for a new ship.

Owned by the Greek firm Costamare, the ship has been on charter to Hapag-Lloyd since it was built in 2000 at Hyundai Heavy Industries in Ulsan, South Korea. It has a capacity of 4,890 TEU and a gross tonnage of 54,437.

It is not unheard of for shipping companies to recognize Halifax in their naming schemes, but there has not been a container ship since Melfi Lines recognized the port with Melfi Halifax in 2004.

There have been numerous Canadian ships with the name recently, including HMCS Halifax, the now strike bound ferry Halifax III , the tug Point Halifax (no longer based in Halifax) and CSL bulk carrier Halifax which went for scrap last year.

In the 1960s Bibby Lines' Halifax City was a regular caller until superseded by container ships in 1972.

.

Canada Express

Last year a number of the OOCL post-Panamax container ships were renamed from traditional OOCL names to Hapag-Lloyd names. The ships did not change appearance, so the changes were made so that Hapag type names would appear in schedules. It is also likely that the charters were transferred from OOCL to Hapag, thus better reflecting the balance of activity in the service.

One such ship is the former OOCL Dubai, which arrived yesterday as Canada Express, with many Hapag-Lloyd containers visible.

The ship is a typical post-Panamax OOCL vessel, built by Koyo Dockyard in Mihara, Japan in 2006. It measures 66,426 gross tons and carries 5888 TEU. It is owned by Nissen Kaiun of Japan, but managed out of Hong Kong by Fleet Management Ltd (OOCL).

.

Hapag-Lloyd in play

TUI, the parent company of Hapag-Lloyd has been trying to unload its 49.8% interest, while the Albert Ballin Group (Kuehne & Nagel) has been trying to sell its 50.2% in the container line.

Meanwhile it was announced this week that Onyx, an arm of the Oman Investment Fund has acquired 15% of Hapag-Lloyd, and a Chinese firm is interested in another 10% or so.

Just whose shares they are actually buying is not clear, but it seems that they are buying TUI's shares. TUI will then use the proceeds to buy Ballin's shares. Sounds complicated?

Hapag is the biggest container customer of the port of Halifax, on its own and through its tie ins to ACL, OOCL, etc., on shared services. Therefore its well being (and its ability to invest in newer ships) should be of major interest.

.

HAPAG-Lloyd's future, sunny or gloomy?

1. Tokyo Express sails 2011-02-05 on a sunny day.

2. New York Express arrives 2011-02-06 on a gloomy day.

HAPAG-Lloyd, the world's fifth largest container line, and Halifax's largest container customer is apparently set to be "floated" by IPO. The shipping company is now owned 49.8% by TUI a German travel company and 50.2% by the Albert Ballin Group (which consists of an number of backers.)

TUI has been trying to unload its share of H-L for several years, but the economy stalled efforts to float it on the stock market. A return to prosperity by Maersk (the world's largest) and a settling down of concerns about MSC and CMA/CGM (the #2 and #3 lines) have lead to reports that TUI will soon be making a move to sell about half of its current stake by IPO.

There is still concern among financiers as to who might be in the market for such a small chunk of H-L, since most major players would want a majority. There is also the issue of whether H-L is profitable enough to bring in a good price. Time will tell.

.

In the meantime HAPAG-Lloyd continues to stream in and out of Halifax on a regular schedule.

.

Kiel Express

Kiel Express (west bound) arrived this afternoon to join sister ship Stuttgart Express (east bound) at Fairview Cove. They are two of eight Hapag-Lloyd ships built between 1991 and 1994 of 53,783 gross tons and carrying 4639 TEU. She is seen above in Bedford Basin, with the tug Atlantic Larch alongside, ready to make the turn around Seaview Point for Fairview Cove.

Kiel Expresss was built as Hanover Express, in 1991, but her name was appropriated by a new Hapag ship in 2007, one of their 93,750 gt, 8749 TEU giants, built to run from Asia to Europe.

Kiel Express

Kiel Express slides through the Narrows this morning on her way in to Fairview Cove. The ship is the name vessel of a class of eight ships, all of which are regular callers in Halifax.

Built in 1991 by Samsung Shipbuilding & Heavy Industries in Koje, Japan, she measures 53,783 gross tons and carries 4626 TEUs.

Svitzer Canada's Point Chebucto is on her starboard bow, and out of sight of the camera, readying to turn the ship once it enters Bedford Basin.