Wan Hai's Strategic Move
Exploring the Impact of a New Shipping Alliance
In the ever-evolving landscape of global maritime logistics, strategic alliances and fleet expansions are pivotal in shaping the future of container shipping. Wan Hai, currently the 11th largest container carrier with a robust fleet and ambitious order book, stands at the crossroads of opportunity and challenge. As the industry braces for significant shifts due to geopolitical tensions, regulatory changes, and evolving market demands, Wan Hai's potential entry into a new shipping alliance could redefine its trajectory. This move not only promises to enhance its operational capabilities but also offers a strategic advantage in navigating the complexities of modern supply chains. In this dynamic environment, the decisions made today will reverberate across the global trade network, impacting transit times, service reliability, and ultimately, the efficiency of supply chains worldwide.
Wan Hai's Current Standing
Wan Hai boasts a fleet of 123 ships with a capacity of 525,923 TEU, making it a significant player in the container shipping industry. The carrier is active in all main trades except the Far East-Europe route, which it exited in 2019 due to falling rates and the small size of its vessels. However, Wan Hai's order book is interesting, featuring several new ships, including four with a capacity of 13,458 TEU and a recent order for 20 Methanol dual-fuel vessels in the 8,000-8,700 TEU range. 1
Currently, Wan Hai cooperates with ONE (The Alliance) on the Asia to US West Coast route and with Hapag Lloyd (currently The Alliance, as of February 2025 Gemini) on the Asia to US East Coast route.
The Invitation to Join an Alliance
Wan Hai Lines’ general manager, Tommy Hsieh, recently revealed that the carrier had been invited to join a shipping alliance. This indicates that the initiative does not come from Wan Hai but from one of the four major alliances. This invitation could be a game-changer, offering Wan Hai a strategic advantage and potentially re-entering the Far East-Europe trade.
Who Could Be the Likely Candidate?
The motivation for an alliance to take on a new partner can be twofold: either they are looking for more loads and volume on these trades or for capacity and vessels. Let's analyze the potential candidates:
Ocean Alliance: As the largest alliance on the Far East-Europe and Far East-US North America trades, Ocean Alliance would not need another partner for volume or vessels.
MSC: Operating as a standalone entity, MSC would not be the best fit due to cultural differences. With the impending 2M split and the end of the Consortia Bloc Exemption Regulation (CBER), MSC is likely to pursue its exponential organic growth.
The Alliance: The Alliance is losing Hapag Lloyd as a partner to Gemini by February 2025 and is as such already weakened. Were The Alliance to lose Wan Hai support, then that would come as a tremendous blow to them. On the other hand Wan Hai is a good cultural fit to the remaining
partners in The Alliance.Gemini: Created by Hapag Lloyd and Maersk Line, Gemini might seem robust enough without another partner. However, the Suez-Houthi crisis has pressured the original setup, increasing transit times and stretching their capacity. Wan Hai could add the necessary ships to the Gemini constellation, continuing its cooperation with Hapag Lloyd on the US East Coast and possibly retiring from its cooperation with ONE on the US West Coast.
Looking ahead
For shippers, the next nine months will bring tremendous shifts and changes in services. Apart from the Ocean Alliance, the other three alliances will undergo a complete metamorphosis in their service portfolios. Transit times and transshipment ports will change dramatically, impacting product lead times and putting extra stress on stock levels. Supply Chain Managers face a tremendous challenge ahead, with impending strikes and unrest in ports further creating havoc on schedule reliability.
Wan Hai's potential entry into a new shipping alliance could be a strategic master.
Lena von Fritschen
Director Market Intelligence
Source: Alphaliner