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by Boltgolt 1909 days ago
This "Carrier Alliance" does sound an awful lot like a Carrier Cartel
1 comments

It's not quite how it sounds. There are a number of Carrier Alliances worldwide - "2M", "THE Alliance" and "Ocean Alliance". And there are a number of container carriers that operate independently without an alliance.

Since around 2008 it has been very difficult for ocean carriers of all types (not just containers) to turn a profit and so they all embarked on different strategies to try to become more efficient and manage costs. Before the Alliances, large ocean carriers needed to have an active and full network worldwide to attract customers. It's kind of like the transit problem: you don't get customers until you have a large network, but you can't afford a large network until you have a lot of customers. So many carriers operated routes that were loss leaders hoping to profit significantly off their mainline trades (you see the same in air travel).

The Alliances were one strategy to try to help these businesses become more efficient while still offering customers door-to-door shipping services, so in THE Alliance, there are a number of carriers each with different primary focuses, which means that they can operate much more efficient routes and take cargo wherever it needs to go.

The price of shipping a container is highly commoditized, there's intense competition in the market, and the margins are razor-thin, so I'm fairly confident that price-fixing isn't a significant factor in this industry. As well, as a shipper, the lions share of your costs getting a container from A to B are not the ocean transportation but everything else. Container storage at the port. Transport to the port. Loading and discharging costs. A multitude of fees that easily double or triple the raw container shipment number. Carriers have invested a lot in this space over the past years to verticalise and able to offer more of these services to their customers, instead of just being a pure ocean carrier. That (freight forwarding) is where the real margins are, and customers appreciate it because they get one simple upfront price, vendor management is easy, etc.