Effective January 5, 2020 the Federal Maritime Commission (FMC) approved an amendment to THE Alliance Agreement, FMC Agreement No. 012439, to add South Korean container liner shipping company Hyundai Merchant Marine Co., Ltd. (HMM) as a party to this global vessel sharing agreement.
THE Alliance Agreement authorizes its parties to charter and exchange space on one another’s vessels as well as coordinate ocean and intermodal transportation services and operations. The geographic scope of this Agreement is the trade between ports and points in the USA and ports of North Asia, South Asia, Middle East, Northern Europe, Mediterranean, Adriatic, Black Sea, Egypt, Panama, Mexico, Canada, Central America, and the Caribbean. THE Alliance currently coordinates the option and sharing of space on approximately 168 container vessels.
THE Alliance began with five members in April 2017, including Hapag-Lloyd, Kawasaki Kisen Kaisha, Ltd. (K Line), Mitsui O.S.K. Lines, Ltd. (MOL), Nippon Yusen Kaisha (NYK), and Yang Ming; container liner operations of K Line, MOL, and NYK have since merged to form ONE effective April 1, 2018.
There are now four members in THE Alliance: Hapag-Lloyd, Ocean Network Express Pte. Ltd. (ONE), Hyundai Merchant Marine Co., Ltd., and Yang Ming. A unique feature of THE Alliance Agreement is its requirement for each member carrier to provide a contingency contribution. Hyundai Merchant Marine Co., Ltd. will be required to add a contribution of USD 25 million to this contingency fund.
This amendment also changes to the validity date of THE Alliance Agreement. It will now “continue in effect until April 1, 2030.” Member carriers have the option to withdraw from the agreement, subject to twelve (12) months written notice, provided that such notice may not be given prior to April 1, 2023.
THE Alliance Agreement is one of three FMC Global Vessel Sharing Agreements/Alliances. The other two are the OCEAN Alliance Agreement, and the Maersk/MSC Vessel Sharing Agreement which is also known as the 2M Alliance.