2M Alliance Targets Faster Transit Times, the New "Key Battleground" for Carriers

Drewry thinks it unlikely we will see an escalation in box ship speeds

The 2M box ship alliance is targeting faster transit times, but analysts Drewry think the move is unlikely to see members Maersk Line and Mediterranean Shipping Company S.A. (MSC) abandon their policy of slow steaming.

Last week the carriers released details of their new Asia-North Europe network that will come into effect in 3Q 2016, and Drewry notes that while the number of ships and services remains relatively unchanged, the port rotations of each loop are altered to include fewer port calls to improve overall transit times.

"The reductions in transit times from 2M's network re-tuning are not huge but it is clear that shippers can expect to see carriers and alliances putting speed and reliability at the forefront of their sales pitches," said Drewry.

"It is likely that the other two alliance groups will design their own networks to be competitive with 2M."

The move looks to be a direct response to comments following the formation of rival carrier group THE Alliance, who touted one of its benefits as offering "very attractive transit times."

But at this stage Drewry thinks it unlikely the move will signal an escalation in box ship speeds, which for the currently struggling carriers is "an unattractive cost proposition in light of bunker prices doubling in recent months."

Ship & Bunker's Global 20 Ports Average, which tracks the average price of bunker fuel in 20 ports responsible for the vast majority of global bunker volumes, shows that on Friday key grade IFO380 was priced at an average of 239.00 per metric tonne (pmt), up from $144.50 pmt on January 20, 2016 - its lowest point in several years.

"Faster transit times and reliability are increasingly becoming key battleground for the alliances to lure shippers. Ships are unlikely to be sped up due to rising fuel prices and on-going cost-cutting measures so expect more streamlined services with fewer port calls." Drewry concluded.

Drewry's view is supported by comments made last year by Maersk Line. who said "a move away from the current slow-steaming approach would entail a fundamental change to the network."