What does the end of the 2M alliance mean for freight forwarders?

What is the 2M alliance?

Set to end in 2025 according to the two shipping giants’ joint statement, the 2M alliance is a partnership between two of the world’s largest shipping companies, Maersk and Mediterranean Shipping Company (MSC). The alliance allowed the companies to share ships, routes, and terminals, which helped them to optimize their operations and reduce costs. As a result, the 2M alliance had a significant presence in global trade and was able to offer competitive pricing to customers.

Key Takeaways

• The 2M alliance is a partnership between two of the world’s largest shipping companies, Maersk and Mediterranean Shipping Company (MSC).
• The alliance is set to end in 2025, according to a join statement.
• The precise impact on freight forwarders and BCOs is still unknown, but there are steps companies can take now to prepare for any necessary adaptations coming down the line.

How will the end of the 2M alliance affect freight forwarders?

With the end of the alliance, the two companies will operate completely independently, which is expected to lead to increased competition in the shipping industry. “Discontinuing the 2M alliance paves the way for both companies to continue to pursue their individual strategies,” A.P. Moller – Maersk CEO Vincent Clerc and MSC CEO Soren Toft said in their joint statement.

While the shipping lines don’t expect any impact to their services in the near term, things could look quite different after the 2025 split.

Some speculate that the increased competition could result in lower prices for customers, but the jury is still out on that important point. But, it could also put pressure on freight forwarders, who may have to negotiate better deals with shipping companies in order to maintain their own margins.

Additionally, the end of the alliance may lead to changes in shipping routes and schedules, which could impact freight forwarders’ ability to provide reliable service to their customers. Freight forwarders may have to adjust their own operations, such as finding new shipping partners or re-negotiating contracts, to account for these changes.

Ultimately, the exact impact on freight forwarders will depend on how the shipping companies choose to reorganize and how other industry players respond to the changes, and it’s still too early to know the specifics. For example, the end of the alliance could open up opportunities for other shipping companies to gain market share, which could benefit freight forwarders. Additionally, freight forwarders can also look for other ways to provide value to their customers, such as through logistics solutions, warehousing, and other services.

What can freight forwarders do to prepare for the end of the 2M alliance?

Monitor the situation closely

Keep an eye on the shipping market and any announcements made by Maersk and MSC regarding their plans after the end of the alliance. This will give you an idea of how the market is likely to change, and help you plan accordingly.

Evaluate your current shipping partners

With the end of the alliance, you may need to look for new shipping partners to ensure that you can continue to provide reliable service to your customers. Consider the routes and services offered by different shipping companies and evaluate which ones are the best fit for your business.

Review and re-negotiate contracts

With increased competition, it may be possible to negotiate better deals with shipping companies. Review your current contracts and see if there are any opportunities to negotiate better pricing or more favorable terms.

Diversify your service offerings

Diversifying your services can help you to mitigate the impact of changes in the shipping market. Consider offering additional services, such as logistics solutions, warehousing, and e-commerce fulfillment.

Communicate with your customers

Keep your customers informed about any changes in the shipping market, and how they may be affected. Be transparent and proactive in addressing any concerns they may have.

Be flexible

Be prepared to adapt to changes in the market and adjust your operations as needed. Be open to new opportunities and be willing to adjust your strategies as the situation evolves.

By taking these steps, freight forwarders can position themselves to take advantage of any new opportunities that arise and minimize the impact of the end of the 2M alliance on their business.