In Ocean Containership Vessel Sharing Agreements to be Realigned in Q2 2017 – What to Expect?, we provided a snapshot of Vessel Sharing Agreements (VSA) across the ocean carrier community, and compared current vessel-sharing agreements to the new agreements that went into effect in April. At the time, potential challenges for shippers included delays in both landside and high seas operations; terminal changes at ports around the world; and congestion at key global container ports.
Two months later, the VSAs are affecting global supply chains, but not as much as some may have assumed. In New alliance business overwhelms Seattle’s largest terminal, and citing the Journal of Commerce, Supply Chain Dive paints of a picture of at least one major port that’s been impacted by the new VSAs. “Seattle’s container Terminal 18 is grappling with crowded truck turn times lasting from one hour to one day as the port absorbs more calls thanks to the new shipping alliances. The delay in new-alliance side effects is due to the length of time it took for new rotations to hit the West Coast, or about a month.”
Additionally, Supply Chain Dive notes that the Ports of Los Angeles and Long Beach struggled with rail timing at dockyards after increased calls from the 2M alliance. This alliance incorporates HMM, MSC & Maersk, and previously only included the latter two carriers.
“Port congestion is nothing new to the supply chain,” Supply Chain Dive concludes, “but the reasons behind it are all but normal and may point to further problems worldwide as the new shipping alliances continue to roll out their services.”
Business as Usual
Overall, the impact to Odyssey’s customers as a result of the new alliances has been minimal, according to John Nikolich, Vice President, International Transportation Management. “Prior to April 1st there was a lot of discussion about the reshaping of the alliances and the trade community planned and reacted well to the changes.”
Some of the challenges stemming from the realignments have been adapting to lines’ individual policies on haz-mat cargo, he points out, equipment availability (in certain areas) as the carriers transition into their new schedules, and isolated terminal congestion (as some newer and bigger ships are phased in to their new routes).
“As of June 1st, 60 days into the revamped alliances, liner services both into and out of North America are consistent,” Nikolich says. “Once we reach the 90-day mark, shippers and carriers in general should be back in lock step. “
Here at Odyssey we’ll be keeping on eye on the developments and helping you better understand both the opportunities and impacts of the VSAs. If you have any questions, please reach out to your Odyssey representative.