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May16, 2016

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Page 10 of 63 THE JOURNAL OF COMMERCE 11 WITH A NEW shipping alliance aim- ing to match the reach of the massive vessel-sharing agreement between the world's two largest container car- riers, shippers are watching closely to see whether regulators approve the latest proposed tie-up and how the remaining carriers respond. The late April announcement of the Ocean Alliance involving CMA CGM, China Cosco Shipping, Evergreen Line and OOCL may have surprised some, but it was inevitable that some combi- nation of the next tier of carriers would align in an effort to blunt the power of Maersk Line and Mediterranean Ship- ping Co.'s 2M. The question now is whether those carriers that have been left behind will stick to their alliances with reduced membersh ip or for m new ones. Clouding the direction they take are a potential merger between German carrier Hapag-Lloyd and Dubai-based United Arab Shipping Co. and the pre- carious financial conditions at South Korea's Hanjin Shipping and Hyundai Merchant Marine. "The alliances fore- stall the inevitable consolidation," one former container line executive said. The Ocean Alliance, set to launch next April, would have the biggest market share on the Asia-Europe and Asia-North America routes, according to research firm Alphaliner. The VSA, which plans to deploy more than 40 global services, would have market shares of nearly 35 percent on Asia- Europe services and 38.9 percent on Asia-North America routes. Those shares include APL, part of Singapore- based holding company NOL, which

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