Gemini Alliance Goes Forward: A Large Number of Port Direct Flights are About to be Canceled

"Asian countries or area like Japan, South Korea, Vietnam and Taiwan will no longer have direct calls on the important Far East Europe trade when Maersk and Hapag Lloyd launch their new alliance in less than a year. "

According to the "Gemini" cooperation plan, Asia's service network will be re integrated, focusing on 19 major ports and transit hubs.

Maersk and Herbert hope that once the network is fully operational after February 2025, the new network design will help them achieve their ambitious goal of providing customers with 90% schedule reliability.

Maritime consulting firm Linerlitica stated that limited port coverage will improve reliability.

Linerlytica co-founder Tan Hua Joo said, "But this comes at a cost because they will incur additional feeder costs and longer transportation times required for indirect port calls."

It is understood that Hutchison Port Holdings Trust stated after its 2023 report that when the Gemini Alliance starts operating, Hong Kong ports may lose business due to network restructuring - and Hong Kong is one of the major Asian ports that has been directly docked by large shipping companies so far.

"As the main export hub for the US and European export markets, Shenzhen Yantian Port has been selected by the Gemini Alliance as the main port of call in the southern region. At the same time, for the Hong Kong Kwai Tsing Ferry Terminal, it is expected that Maersk and Herbert's current throughput in Hong Kong may be transferred to Shenzhen Yantian Port after the operation begins."

It is reported that the Gemini Alliance cooperation agreement will involve seven major trade channels, including transatlantic, Asia West America, Asia East America, Asia Middle East, Asia Mediterranean, Asia Nordic, and Middle East/India Europe.

Both parties plan to operate 26 trunk services on the seven major trade channels mentioned above, which are complemented by flexible and fast shuttle services on a global scale, as well as a strong terminal transfer service system, including terminals owned or controlled by both parties. As an extension of the backbone network, the shuttle network assists future maritime networks in achieving comprehensive coverage.

Among them, the route network between the Far East and Europe will be covered by seven services, with a total of 71 large ships deployed to provide convenient services for Shanghai, Ningbo, Singapore, and the Tanjung Parapas transfer center.

According to the Gemini program, 13 shuttle services will cover 18 ports.

Linerlytica's analysis of current and planned Asia Europe routes shows that THE Alliance operates 41 weekly voyages to Asian ports, while 2M Alliance operates 54 weekly voyages.

Lars Jensen, founder and CEO of Vespucci Maritime, questioned whether shippers are willing to adapt to the additional transportation brought about by the new service network.

He expressed, "From a business perspective, the key lies in the extent to which shippers are willing to accept more transshipment services and fewer direct flights. Although shippers usually prefer direct flights, this is not always feasible. Therefore, whether the Gemini Alliance can fulfill its promised transportation time, including the transshipment process, in practice will be a decisive factor."

As one of the co founders of LinerGrid, Jensen designed precise models through mathematical calculations aimed at optimizing port and operator networks.

He explained, "We have previously used this model to analyze the efficiency of a hub and spoke network. From the perspective of minimizing operating costs, it is clear that a small number of large hub networks are more cost-effective than multiple small hub networks. In other words, from the perspective of global network operating costs, the development direction of the Gemini alliance is meaningful."

Although Hong Kong is not within the coverage of 2M and Gemini's Asia Europe routes, according to Tan Hua Joo, the existing FE3 services of THE Alliance are expected to retain Hong Kong's connections, which means that Herbert's withdrawal has limited impact on Hong Kong's route coverage in Europe.

Maersk stated in an interview, "Our goal is to build a flexible and interconnected shipping network with industry-leading reliability. By concentrating each route on fewer major import and export ports, we can significantly reduce the risk of delays along the way and supplement our core network with an extensive shuttle service network, ensuring fast, direct, and reliable connections with other ports."