On Jan. 25, A.P. Moller - Maersk and MSC Mediterranean Shipping Company (MSC) announced the end of the 2M Alliance. 

“MSC and Maersk recognize that much has changed since the two companies signed the 10-year agreement in 2015. 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 a joint statement. “We have very much appreciated the partnership and look forward to a continued strong collaboration throughout the remainder of the agreement period. We remain fully committed to delivering on the 2M alliance’s services to customers of MSC and Maersk.”

As expected, the news sent shockwaves through the ocean transportation industry. In the 2M Alliance, Maersk and MSC combined the strengths of the world’s two largest shippers, forming one of the three ocean alliances (along with The Ocean Alliance and THE Alliance) that have come to encompass 75% of the ocean container market. This tripartite rule of ocean transportation has inspired a regulatory backlash, with the Biden administration’s Ocean Shipping Reform Act specifically designed to combat these shippers at crowded U.S. ports.  

But as shippers mourn — or celebrate  — the end of one of the ocean transportation industry’s most notable relationships, many look nervously toward the future. Now that Maersk and MSC have called it quits, how are shippers meant to make sense of the aftermath? As shippers begin to move on, ocean container tracking provides a reliable source of ocean freight visibility in an increasingly dynamic ocean container marketplace. 

What Was the 2M Alliance? Origins, Competitors, and Challenges.

Created in 2015, the 2M alliance represented a new horizon in ocean container shipping. The two companies — which, by the end of their alliance, could each handle approximately 4 million TEUs, according to Alphaliner — joined together in hopes of consolidating capacity and applying pressure to smaller competitors.

Since the alliance’s formation, other carriers have followed suit, forming partnerships such as the Ocean Alliance (COSCO, OOCL, Evergreen, and CMA) and THE Alliance (Hapag-Lloyd, ONE, HMM, and YML). According to the International Transport Forum, these three ocean container behemoths have come to consolidate the vast majority of ocean container volume under their alliances, representing as much as 80% of global ocean container capacity.

In recent years, however, U.S. regulators have begun to push back against the power of the ocean container rule of three. In June 2022, President Biden signed the Ocean Shipping Reform Act into law, the first significant ocean container shipping legislation in over two decades. The law, which has since gone into effect, encourages the Federal Maritime Commission to crack down on price-gouging ocean container carrier alliances, with the ambition of making American ports more competitive in the aftermath of the COVID-19 pandemic.

Why Did the 2M Alliance End?

However, it wasn’t increased regulatory and legislative pressure that finally caused 2M to call it quits. According to U.K. ocean container data firm Container Trade Statistics, global trade volumes plummeted 9.5% YoY in November. Paired with a steep fall in rates — which fell 90% YoY in December 2022 in 2M’s primary Asia-West Coast market, according to CNBC — neither the volume nor the profit that spurred Maersk and MSC to partner in 2015 look to be returning to the ocean container transportation industry anytime soon. With a stark new reality for ocean container carriers on the horizon, 2M decided to end its alliance in 2025, at the end of its initial agreement period. 

What Does the End of the 2M Alliance Mean for Ocean Shippers?

With 2M in shambles, shippers are wondering what the breakup of the ocean container shipping industry’s biggest couple means for their operations. We’ve dug into three possible consequences for ocean container shippers. 

Always the Trendsetter: Will 2M’s Split Start a Trend Among Alliances?

After 2M started their alliance in 2015, other carriers began to take notice. Other carriers took note and soon formed today’s remaining powerhouse ocean alliances, THE Alliance and The Ocean Alliance. However, just as they did in 2015, is there a chance that these alliances will follow 2M’s lead once more?

Lars Jensen, CEO of Danish Carrier Vespucci Maritime, seems to think so. In an interview with the The Wall Street Journal, Jensen said, “This is only the beginning of a reshaping of vessel-sharing agreements on especially the major east-west trades.” With major ocean container carrier alliances finding themselves with more capacity than they know what to do with, shippers could soon see other major ocean container alliances coming apart. 

While MSC Sees Smooth Sailing Ahead, Maersk Faces Troubled Waters.

Throughout the tenure of the 2M Alliance, Maersk and MSC pursued different strategies to achieve operational dominance over vital ocean container routes. According to a recent Drewry report, “MSC has been getting its tanks on the lawn by aggressively raiding the second-hand and charter markets, as well as splurging on new orders. Maersk, on the other hand, has focused on its vertical integration strategy and has not sought to defend its number one rank.”

In other words, MSC has been building capacity by using more affordable second-hand shipping assets. In contrast, Maersk has opted for a quality-over-quantity approach to ocean container transportation. While this approach has left Maersk with a somewhat diversified business portfolio as they look to bolster their reputation as an end-to-end logistics service provider, it’s also left them in a challenging position: too large to join other alliances without attracting unwanted attention from regulators, yet too small to continue service at the level they were able to provide as part of 2M. Pinned between a rock and a hard place, the Danish ocean container shipping giant faces an uncertain future in the coming years.

Uncertainty Looms as Experts Debate Alliance Effect on Rates

Following the breakup of 2M, ocean container shipping experts are debating the effect of 2M’s dissolution on ocean container rates, which have fallen precipitously in recent months. 

Stefan Verberckmoes, shipping analyst and Europe Editor for Alphaliner, predicts the end of 2M will have a muted effect, if any, on rates. “I don’t think that alliances have had an impact on price,” Verberckmoes said in a recent interview with FreightWaves, “If prices are declining, that means one or two carriers are going for market share, and I don’t think alliance changes have any effect on that. When it comes to rates, it is always the market that decides.” 

However, Sea-Intelligence CEO Alan Murphy disagrees, arguing that the high-stakes competition between ocean container shipping alliances keeps ocean container rates down. “In every simulation we’ve done where we look at how you could operate services more independently, with fewer VSAs and fewer alliances, the price goes up,” Murphy told FreightWaves.

How Ocean Container Tracking is Helping Shippers Navigate the Transportation Industry’s Biggest Breakup

Facing a 2023 forecast rife with labor shortages, volatile operational costs, and unpredictable geopolitical conflicts, the last thing today’s ocean container shippers need is another potential pain point. By turning to ocean container tracking through an API-enabled ocean container tracking software provider, shippers can harness the latest in ocean freight visibility technology to bolster resiliency in the face of post-2M uncertainty. For nervous ocean container shippers, we’ve dug into three critical ways ocean container tracking software can help strengthen supply chains following the transportation industry’s biggest breakup.

Customizable Exception Alerts Through Ocean Container Tracking Keep Ocean Container Shipments On-Track

With customizable exception alerts through ocean container tracking, shippers can rest easy knowing that ocean container tracking software is keeping an eye on their shipments from port to port, notifying them every step of the way. Customizable alerts mean that ocean container tracking alerts can be geared to reflect unique ocean container shipping operations, helping shippers navigate a dynamic post-2M ocean container transportation industry.

Streamlined Ocean Container Tracking API Ensure Optimized Communication With All Ocean Container Logistics Partners

As alliances fall, shippers must reconsider outdated strategies. As shippers revamp their supply chains with new logistics collaborators in the wake of 2M’s collapse, partnering with an ocean container tracking software provider that offers a streamlined, fully-integrated API (application programming interface) ensures that ocean container shippers can contact all logistics partners through a single, cloud-based interface.

Standardized Ocean Container Tracking Data Helps Shippers Evaluate Ocean Container Shipping Operations

In a dynamic ocean container marketplace, shippers must understand their operations accurately. Through a partnership with a tech-enabled ocean container tracking software provider, shippers can access standardized data and uniform milestones to transform their raw data into actionable insights. Facing the uncertainty of a post-2M ocean container transportation landscape, shippers are turning to ocean container tracking software for unprecedented access to streamlined analytics.

After the Transportation Industry’s Biggest Breakup, Ocean Container Tracking With OpenTrack Gives Shippers Support

Nobody likes a breakup. With OpenTrack, shippers can confidently weather the worst of the post-2M storm. OpenTrack’s groundbreaking ocean container tracking API integrates with pre-existing TMS to ensure that shippers can keep what works and change what doesn’t, bolstering the resiliency of ocean container tracking operations. Book a demo with OpenTrack today, and see how ocean container tracking software can strengthen your supply chain.