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Drewry Calls Some Alliance Port Choices 'illogical'
Kinghood International Logistics Inc | Updated: Mar 06, 2017

 London-based shipping research and consulting firm Drewry said it has examined the correlation between carrier terminal ownership and the choice of port calls by the 2M Alliance, and the upcoming alliances in April.

   "The results show that the choice of port call is often not in line with carrier terminal ownership interests," according to Drewry's recently launched Ports and Terminals Insight report.

   “Our analysis shows that even when a shipping line has a significant stake in a terminal, this doesn’t necessarily mean that the port is selected for the network schedule," said Neil Davidson, Drewry’s senior analyst for ports and terminals. "In some cases, the correlation is tight, in others there is no obvious logic at all."

   Drewry said it looked at both gateway markets in the Benelux countries, the Southwest Pacific, Southwest and South China/Hong Kong, as well as at transshipment hubs in Southeast Asia, the Mediterranean, the Middle East and Central America/Caribbean.

   "For gateway ports, you can see that carriers have to bear in mind the port preferences of shippers, for example, so the choice of port is influenced by other factors," Davidson said. "But what was particularly surprising was that for the choice of transshipment hub, which is entirely within the control of a carrier, the correlation was also weak in a number of cases."

   As an example, Drewry pointed to ports in Benelux, where it said, "The port choices made by the Ocean and THE alliances correlate very closely to the member lines’ terminal interests, but for the 2M, the opposite is true."

   “What this analysis shows is that individual lines are not entirely in control of their own destinies when it comes to port choices, as partner lines in their alliances may have conflicting port choice preferences and particular idiosyncrasies,” Davidson said. “Moreover, even if alliance partners have corresponding port preferences, there is still potential for conflict at the terminal level if more than one line in an alliance has interests in different terminals in the same port, as is the case with the Ocean Alliance in Rotterdam for example.

   "The horse-trading between alliance members extends beyond port choices and into the choice of specific terminals within any given port," he said. "This illustrates the fact that even if a terminal operator brings in a shipping line as a joint venture partner, this is no absolute guarantee of securing an alliance’s volume."

   A.P. Moller-Maersk CEO Søren Skou told securities analysts in December that his company plans to increase utilization of its APM Terminals (APMT) unit by moving more cargo from Maersk Line and its vessel sharing alliance partners through APMT's facilities.

   "It is a huge fixed cost base we have built up and we can do more to fill it up in the coming years," he said.

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