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Home News World Shipping News Alliance must bring clear benefits to UASC
Alliance must bring clear benefits to UASC PDF Print E-mail
Wednesday, 19 March 2014 09:10
Hellenic Shpg 18/3/14

There will not be a multiple wedding involving Dubai-based container
carrier United Arab Shipping Company unless UASC eyes the clear benefits of
joining an alliance, says UASC CEO Jørn Hinge in a comment to
ShippingWatch, after everything seems to point to the Arabian carrier as
the next contender in terms of joining one of the biggest alliances: CKYHE.

ShippingWatch reported last week that the Asian-based CKYH alliance and
UASC have been negotiating in recent months. CKYH was expanded with the
inclusion of Evergreen last week, thus getting an "E" attached to its name.
However, Jørn Hinge declines to comment on whether the carrier has been in
talks with CKYHE members, though he does make the following general comment
about the possibilities of joining an alliance:

Chinese collaboration paves the way for new CKYH

"That depends entirely on the details of how a potential link to an
alliance is formed. Right now we have solid long-term collaboration
agreements in place with China Shipping and Hanjin. We're pleased with
this, and there are other options out there than just alliances, which
bring both benefits and disadvantages," Jørn Hinge tells ShippingWatch,
though he declines to comment on whether Evergreen's decision to join CKYH
has increased UASC's appetite for joining the alliance.
Close cooperation

Just this morning, SeaIntel - in its latest analysis - stated that several
carriers could be headed toward joining the former CKYH alliance following
the expansion with Evergreen. SeaIntel pointed to China Shipping Container
Lines (CSCL) and UASC as the most obvious candidates.

In addition to Evergreen, CKYHE consists of Cosco, K-Line, Yang Ming, and
Hanjin, and last week Cosco and CSCL announced a significantly increased
collaborative agreement between the two carriers, which was seen by several
observers as the first step toward an actual Chinese merger.

UASC has a ten-year collaborative agreement in place with CSCL, and a
fifteen-year deal with Hanjin. Additionally, UASC is constructing a new
fleet of ten 18,000 teu container ships in cooperation with CSCL. These
ships are expected to be deployed on Europe-Asia in order to make sense
financially.

"If CSCL joins the CKYHE alliance on Asia-Europe, we assume that it will
necessitate an expansion of the CKYHE network. We expect that the carriers
will introduce new services to Northern Europe and the Mediterranean," says
SeaIntel.
Shanghai as hub

ShippingWatch also reported last week on the considerations behind the
massive, expanded CKYH collaboration. First among these was the fact that
Shanghai's new free-trade zone status could become more valuable to
carrier's with close ties to Chinese partners.

Second was the fact that carriers could directly or indirectly benefit from
the new Chinese state subsidies for scrapping, where carriers receive state
funds for the Chinese ships.