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U.S. FMC's Approval of CKYHE's Agreement Likey to Rock G6's Dominance of American Container Market

2014/07/14 | By Steve Chuang

CKYHE Alliance's agreement on expanding cooperation on maritime trade routes to and from the U.S. has just been formally approved by the U.S. Federal Maritime Commission (FMC), which should drive growth of the two Taiwanese members, Yang Ming Marine Transport Corp. and Evergreen Marine Corp., starting next year, with any benefit to be realized to be felt as early as Q2, 2015.

CKYHE is composed of five major, international container carriers, including Ccscon of China, K-Line of Japan, and Hanjin of South Korea as well as the  abovementioned Taiwanese liners, which have plied the 10 trade lanes between Asia and North Europe and the Mediterranean Sea since Evergreen Marine formally joined the alliance early this year. The synergy created, including slot exchanges, and the overall market share  all have been greatly enhanced.

To further jointly explore the U.S. market, the alliance members submitted an agreement to the FMC in late May for regulatory approval of options as replicating the cooperation they have in place on the Asia-Europe trade lanes to the U.S.

Industry insiders say that U.S.'s container market is dominated by the G6, one consisting of American President Lines, Hapag-Lloyd, Mitsui OSK Lines, NYK Lines, OOCL, Hyundai Merchant Marine, with a share of 32.5%. With Evergreen Marine helping to drive CKYHE's share to 32.3%, G6's dominance will likely wane, particularly after CKYHE members optimize current operations on the Asia-America routes through cooperation to offer more efficient, competitive services. (SC)

Status of CKYHE and G6

CKYHE

G6

Member

Ccscon, K-Line, Yang Ming Marine, Hanjin, Evergreen Marine

American President Lines, Hapag-Lloyd, Mitsui OSK Lines, NYK Lines, OOCL, Hyundai Merchant Marine

Share in U.S. Market

32.3%

32.5%

Share in European Market

32.5%

19.5%

Source: Alphaliner