Major carriers Hapag Lloyd and Maersk saw their Gemini Co-operation Agreement go into effect on Monday after the US Federal Maritime Commission did not raise objections.
The Agreement was filed with the Federal Maritime Commission on 31 May 2024 and was reviewed by the agency under statutory timeframes.
In a statement the FMC noted that it is legally empowered to assess the competitive effects of an agreement to work out whether it is likely – by a reduction in competition – to cause an unreasonable increase in transport costs or a decrease in transport service. If the US FMC makes such a finding then it can seek an injunction in a federal district court.
“The Commission has not determined to seek an injunction against the Gemini Cooperation Agreement at this time,” the US FMC said on Monday.
The agreement will be subject to extensive oversight from the Commission as parties to alliance agreements must agree to monitoring conditions and requirements.
The Gemini Cooperation Agreement allows Maersk A/S and Hapag-Lloyd AG and Hapag-Lloyd USA, LLC to share vessels in the trades between the United States and Asia, the Middle East, and Europe.
According to the text of the Agreement (available on the US FMC website) the major ports of call will be served by direct call by mainline services and other ports will be served by a shuttle network although, initially, only one service in the shuttle network will call in the United States and it will consist of two vessels with nominal capacities up to 2,800 TEUs. The Gemini Agreement allows for up to three services of up to three vessels each, with each ship allowed to have a capacity up to 5,000 TEUs. All vessels in the shuttle network will be supplied by Maersk although Hapag will have the option to time charter vessels to Maersk and Maersk will have the right to call upon Hapag to time charter vessels to Maersk.
The parties are authorised to discuss and agree on the size, number and operational characteristics (including age and speed) of mainline network vessels to be operated. Initially, the Mainline Network in the
Trade shall consist of approximately 123 vessels with nominal capacities ranging from approximately 3,700 TEUs to approximately 16,000 TEUs. Maersk and Hapag can also discuss and agree on the ports of call, port rotation,
itineraries, service speed, and all other aspects of the structure and scheduling of the services to be operated including on-time performance criteria and consequences for failing to adhere to the established schedule and/or to load cargo.
Commenting on operational collaboration, the two carriers released a joint statement announcing that they will launch Gemini in February 2025.
“The ambition is to deliver a flexible and interconnected ocean network with industry-leading schedule reliability above 90 percent once fully phased in,” the statement reads, adding that in October 2024, an announcement will be made as which network will be put to sea first.
“Reliability, connectivity and sustainability are the keywords in the networks we are presenting today, and we are pleased that we now can give our customers full transparency about how we will deliver a best-in-class ocean network so they can begin planning despite a highly dynamic situation,” said Rolf Habben Jansen, CEO of Hapag-Lloyd.
“We are looking forward to the launch of our completely redesigned network next year, and we are happy to reconfirm that our schedule reliability target remains unchanged irrespective of which network we will phase in. We believe our collaboration will raise the bar for reliability to the benefit of our customers and set a new and very high standard in the industry,” said Vincent Clerc, CEO of Maersk.
Depending on which network the cooperation will phase in, the new network consists of either 27 or 29 ocean mainliner services supported by an extensive network of 30 intraregional shuttle services. The collaboration will comprise of either 300 or 340 vessels.
The Trans-Suez network
- Approx. 300 vessels
- 3.4 million TEU capacity
- 57 services (27 mainliners, 30 shuttles) (vs. 58 services in January 2024 with 32 shuttles)
Cape of Good Hope Network
- Approx. 340 vessels
- 3.7 million TEU capacity
- 59 services (29 mainliners, 30 shuttles)
