Trans RINA, Vol 161, Part A4, Intl J Maritime Eng, Oct-Dec 2019
Following the strategic alliance restructuring in 2017, shipping companies had to consider other carriers when choosing their primary hub port. This had a great impact on hub ports in Southeast Asia (MOTC, 2017; Yap and Zahraei, 2018), particularly the Port of Kaohsiung. For example, after the CMA CGM group (the parent company of APL) joined the Ocean Alliance in 2017, it readjusted APL lines at Kaohsiung by removing the trunk route to the west coast of the United States, thus significantly reducing activities at Kaohsiung. According to Alphaliner (2018), the total capacity of the three new shipping alliances represents about 80% of global capacity. The new alliances have a stronger relationship, which produces a greater limiting effect. For example, carriers shipping containers from a Southeast Asian port to the Port of Kaohsiung and then transshipping them to North America would formerly dispatch feeder ships to collect the containers from various Southeast Asian ports and then transfer them to Kaohsiung, whence they would then be transshipped to their final destination. Now, however, an alliance member shipping containers to North America sends out its mother ship operating on a trunk route to berth directly at the main port in Southeast Asia, and containers from other alliance members are transferred to this mother ship and then transshipped directly to North America. In this case, no feeder ship is required to transport containers to the Port of Kaohsiung for transshipment, thereby directly reducing the volume of such activity at this port.
Following formation of the new shipping alliances, the Port of Kaohsiung witnessed a drastic decline in its transshipment container volume during the second quarter of 2017, as shown in Figure 7. This study determined the main causes of this decline, as follows:
1. The Alliance readjusted its shipping lines had added an European route in Japan. Previously, CKYH+E
had four shipping lines operating on the Far East– Europe and Mediterranean routes, without connecting to a Japanese port. Japanese shipping carriers such as K-Line and NYK typically transshipped containers from Japan via the Port of Kaohsiung to their destination port. However, after alliance restructuring in the second quarter of 2017, THE Alliance added port connections to Tokyo, Nagoya, Kobe, Shimizu and other Japanese ports on the Far East–Europe trunk routes. Consequently, containers from these ports no longer needed to transship at the Port of Kaohsiung.
2. Trunk routes have been deployed in Southeast Asia. In 2018, Jakarta and Cai Mep incorporated direct shipping lines to trunk routes for the west coast of the united states. This directly influenced the volume of containers (i.e., from the United States, Vietnam, and Indonesia) handled at the Port of Kaohsiung.
3. The Japanese container operator ONE adjusted its near-sea shipping lines for THE Alliance. Asian regional lines originally operated by NYK and K-Line, particularly the feeder lines between Taiwan and the Philippines, called at the Port of Kaohsiung twice on a service loop (eastbound and westbound respectively) before alliance restructuring (first quarter of 2017), but only called once after restructuring (second quarter of 2017).
4. APL’s acquisition by the CMA CGM group also influenced the supply of US containers transshipped at Kaohsiung. Containers formerly transshipped in Kaohsiung are now handled in Singapore.
In summary, Kaohsiung Port has been affected severely by changes in the new shipping environments, ship upsizing, and carriers business and financial situations (mergers, closure, or alliance restructuring), all of which have severely decreased the transshipment container volume here and jeopardized the port’s hub status.
Year
Figure 7: [Volume decline of transshipped containers at the Port of Kaohsiung following shipping alliance restructuring (Q2 2017)]
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©2019: The Royal Institution of Naval Architects
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