MSC and Zim "form an alliance", Maersk's response

The Israeli shipping company said it had "entered into a new operating agreement with MSC covering multiple trade routes".

"The scope of cooperation includes services between the Indian subcontinent and the Eastern Mediterranean, the Eastern Mediterranean and Northern Europe, and East Asia and Oceania," Zim explained. These agreements include ship sharing, space purchase and space swap arrangements, it added.

The more comprehensive agreement with MSC comes after Zim signed two Vessel sharing agreements (VSA) at the end of last month. One involves Zim withdrawing vessels from its Asia-Australia/New Zealand route and instead establishing a ship sharing VSA with MSC's Panda Loop.

Subject to regulatory approval, Zim will offer its services under the ZAX brand name and will provide three of the seven vessels deployed around 5,000 TEU. 

For its other two Oceania routes, Zim will become a space charterer on MSC's Kiwi Express and Capricorn routes and will therefore be able to free up 10 2,500-2,800 TEU charterers to deploy on other routes, stop chartering or seek subchartering.

In addition, MSC announced the signing of a Vessel sharing agreement (VSA) between Northern Europe and Israel with Haifa based Zim Shipping for the deployment of five 6,700 TEU vessels, with Zim providing two.

As of now, VSA on the Northern Europe-Israel route has not been officially confirmed by Zim, but the cooperation with MSC on the Northern Europe-Eastern Mediterranean route also includes space leasing to meet Zim's trade needs with Turkey. 

In addition, the India - Israel and India - Turkey routes after the reorganization of the global route network will also be shared by vessels in cooperation with MSC, and the vessels of the two routes will be provided by the Star.

After the dissolution of the 2M alliance at the end of next year, the next vessel sharing agreement between Zim and MSC VSA is likely to be between Asia and the East Coast of the United States. 

Zim and 2M currently have space swap and ship sharing cooperation on trade routes, which will expire upon termination of 2M.

Meanwhile, Zim is also in the process of signing a long-term lease with Seaspan, the world's largest independent non-operating container ship, to take delivery of 10 15,000 TEU LNG powered vessels, which it intends to deploy on routes between Asia and the US East Coast. 

However, it is worth noting that in the past two quarters, Star Shipping has appeared operational risks, becoming the most loss-making shipping company this year, and Star has taken some measures to deal with it, including cutting capacity by stopping chartering, subchartering ships and other ways.

In addition, Star Line has embarked on a restructuring of its global route network. In June, it ended service between Asia and the West Coast of the United States. According to Star Line's second quarter 2023 results report released on August 16, the company had a net loss of about $210 million during the reporting period, compared to a net profit of $1.34 billion in the same period last year. 

This shows the challenges companies face in a changing economic environment and increasing market competition.

According to Maersk CEO Vincent Clerc, while MSC is clearly prepared to enter into vessel sharing agreements (VSA) with other operators, Maersk will take a different approach in order to expand other route markets before and after 2M's dissolution.

While he did not rule out the possibility of space swap agreements with other operators after the dissolution of the 2M alliance, he was not enthusiastic about Vessel sharing (VSA). "The disadvantage of being a third-party logistics company (3PL) is that half of your commitments to customers are delivered on someone else's ship," he explained.