Jørn Hinge: Alliance must bring clear benefits to UASC

If United Arab Shipping Company is to join an alliance, the decision depends entirely on how big the benefits are to the Dubai-based container carrier, UASC CEO Jørn Hinge tells ShippingWatch.

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.

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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.

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SeaIntel: Chinese collaboration changes nature of alliances 

Cosco and CSCL in large-scale collaboration 

New alliance settles in on Asia-Europe  

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