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Understanding Ocean Shipping Carrier Alliances

Beverly Altimore - Monday, September 19, 2016

International ocean shipping is required by major businesses on a frequent and predictable basis. The exploding demand pre-2008 and a need to utilize vessels that burned fuel more efficiently when oil prices were skyrocketing, prompted ocean carriers to build bigger, more cost-effective ships to handle larger loads. Today vessel owners are building larger which has in turn led to the formation of Vessel Sharing Agreements [VSA] - alliances that allow individual carriers to share vessel space amongst their partners in order to offer service to more ports without requiring additional vessels. The four largest ocean alliances today move about 90% of the global ocean container freight. This means that super carrier Maersk can use the space on their partner’s, MSC, ship. The result is that alliances enable a more efficient use of vessel space and carriers can offer a wider range of service without having to build more ships.

The industry benefits from this arrangement because the ocean network can now be designed to guarantee regular and predictable port service. The regulations of alliance discussions dictate that they are based on co-ordination of operations and not on commercial considerations, so each carrier within an alliance still maintains its own sales force and marketing program. It is, however, important that BCO’s remain mindful of the demand for routes and service reliability amongst different alliances. USSA provides its members the benefit of monitoring industry trends in order to provide effective cost-management solutions for their ocean freight requirements.

When evaluating ocean freight rates online, it is important to remember that you may need to contract across alliances and not just specific carriers. This can enable more efficient risk management. Also, this means that you may have access to greater geographic regions and can arrange for additional sailing from a single carrier as a result of alliance access.

Today’s existing carrier alliances will be completely revamped in early 2017, leaving no VSA untouched by the changes.  USSA will be monitoring the service offerings to determine the best mix for reliable shipping options.

USSA is an established market leader in providing competitive ocean freight rates. The strategy of leveraging off of combined volumes, industry expertise, and the latest technology enables reliable service delivery at favorable rates. Contact us today for more information.
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