Posted on January 22, 2024
Global shipping news

‘Gemini Cooperation’: 10 Things to Know About Hapag-Lloyd and Maersk’s New Shipping Alliance

The recent announcement of the ‘Gemini Cooperation’ between Hapag-Lloyd and Maersk has sent ripples through the industry. This partnership is set to reshape the landscape of global alliances and has far-reaching implications. Here are 10 things you need to know about the ‘Gemini Cooperation.’

1. 2M Alliance Dissolution: A significant development occurred when MSC and Maersk announced the end of the 2M alliance, which had been a major player in the industry for 17 years. This move triggered a series of changes in the industry.

2. Hapag-Lloyd’s Departure from THE Alliance: In January 2024, Hapag-Lloyd’s exit from THE Alliance signalled a notable shift in its operational approach. THE Alliance, established in 2016, includes Hapag-Lloyd, HMM, Ocean Network Express (ONE), and Yang Ming among its members. This alliance is one of the three key global liner alliances, alongside 2M and the Ocean Alliance, which features CMA CGM, Evergreen, and COSCO.

3. The Birth of ‘Gemini Cooperation’: Starting in February 2025, Hapag-Lloyd and Maersk will embark on a new operational collaboration known as the ‘Gemini Cooperation.’ This partnership represents a substantial change in Maersk’s strategy, as it previously stated its reluctance to join another vessel-sharing agreement.

4. Scope of ‘Gemini Cooperation’: The ‘Gemini Cooperation’ will encompass seven trades, covering major routes like Asia-US, Asia-Middle East, and transatlantic. It will operate 26 mainline services with a combined capacity of 3.4 million TEU, with Maersk providing 60% of the capacity and Hapag-Lloyd 40%.

5. Schedule Reliability: A key objective of the shipping alliance between Hapag-Lloyd and Maersk is to improve schedule reliability to above 90%. This is a significant departure from the current industry average of 60% and reflects the commitment of both partners to enhance service quality.

6. Decarbonisation Goals: By working together, Maersk and Hapag-Lloyd aim to accelerate the decarbonisation process. Maersk is committed to achieving net-zero emissions by 2040, while Hapag-Lloyd aims for 2045. This aligns with the industry’s broader efforts to reduce its environmental footprint.

7. Hub & Spoke Operation: The ‘Gemini Cooperation’ will adopt a ‘hub & spoke’ operational model. This approach relies on designated hub ports served by feeder networks. While promising, it also presents challenges, such as ensuring reliable connections and managing potential operational disruptions.

8. Impact on THE Alliance: Hapag-Lloyd’s departure from THE Alliance leaves its remaining partners, including ONE, Yang Ming, and HMM, in a vulnerable position. They must now consider their options and potentially reconfigure their services.

9. Global Alliances in Container Shipping: Global alliances are agreements that facilitate vessel sharing, slot exchanges, and other forms of cooperation among major liner companies. These alliances aim to provide comprehensive service networks, competitive sailing frequencies, extensive port coverage, and cost-efficiency for carriers and shippers.

10. Balancing Supply and Demand: Global alliances were established to address the industry’s challenge of an imbalance between global supply and demand, leading to operational and financial difficulties for carriers and shippers.

The ‘Gemini Cooperation’ between Hapag-Lloyd and Maersk marks a significant shift in the container shipping industry. It demonstrates the industry’s adaptability and the ongoing quest for efficiency and sustainability. As this partnership unfolds, it will undoubtedly have a profound impact on global trade routes, service quality, and competitive dynamics within the container shipping sector. 

FAQS

What are the key objectives of Gemini Cooperation?

The Gemini Cooperation, a strategic alliance between Maersk and Hapag-Lloyd, aims to enhance the quality of services delivered to customers, achieve efficiency gains in operations, and accelerate the decarbonization of the maritime industry. This partnership is set to redefine ocean network services through enhanced flexibility, reliability, and sustainability, strengthening the capabilities of both companies and setting a new standard for operational excellence in the global shipping industry​.

How does the Gemini Cooperation impact shipping routes and services?

The Gemini Cooperation will use a ‘hub & spoke’ model focused on main hub ports connected by feeder networks. This should optimize global shipping routes, service quality, and competition in the container shipping industry. It may lead to a more dynamic and fragmented marketplace.

The cooperation centres on 12 major terminal hubs located in key regions around the world. These hubs offer 26 main shipping routes, supported by 32 regional shuttle services to and from the hubs.

What benefits do customers gain from the Gemini Cooperation?

Customers of the Gemini Cooperation can expect industry-leading reliability, improved transit times, geographical reach, and speed to market. Additionally, the partnership will offer easier access to a wider range of transportation products and logistical services, emphasizing flexibility and reliability in routing options for supply chain planning​​.

Are there any potential challenges or regulatory considerations associated with the Gemini Cooperation?

While the Gemini Cooperation presents numerous benefits, there are potential challenges such as ensuring reliable connections within the ‘hub & spoke’ model and managing operational disruptions. Additionally, the partnership must navigate the competitive dynamics resulting from Hapag-Lloyd’s departure from THE Alliance and adapt to the evolving alliance landscape​​.

How does the Gemini Cooperation address environmental sustainability and industry responsibility?

Maersk and Hapag-Lloyd have pledged to decarbonize their shipping fleets. Both companies have set ambitious goals to reduce greenhouse gas emissions. The new network designed by the Gemini Cooperation is intended to support these decarbonization journeys, aiming for net-zero emissions by 2040 for Maersk and a strong focus on sustainability for Hapag-Lloyd​​​​. This cooperation is an important step for the maritime industry. It aims to improve service quality and promote sustainable shipping.

‘Gemini Cooperation’: 10 Things to Know About Hapag-Lloyd and Maersk’s New Shipping Alliance

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