2M Alliance Ends Slot-Sharing Deal With South Korea's SM Line
South Korean upstart SM Line will no longer be part of the 2M service network, 2M partner MSC announced Monday.
The giants of the 2M Alliance - number-one carrier MSC and number-two Maersk Line - signed a slot-swapping arrangement with SM line in early 2020. The agreement gave 2M extra capacity between East Asia and the North American West Coast, including an additional two services per week to the Pacific Northwest. This service expansion included calls in Prince Rupert, Vancouver, Seattle and Portland. It did not cover services to the U.S. East Coast or the U.S. Gulf Coast.
MSC did not announce a reason for the cancellation of the service, but industry speculation points to the profitability of the 2M carriers' own internal bookings, which are in high demand in an overheated freight market. The announcement follows shortly after 2M dropped its slot-sharing partnership with Israeli carrier Zim, which also gave it additional coverage in the Pacific Northwest.
Without 2M, SM Line will head out on its own, joining the list of independent carriers on the transpacific lanes. SM Line also has hopes to launch an Asia-U.S. East Coast service to add to its West Coast offering, and it had planned to launch an IPO in November to raise funds for the venture. However, it postponed the offering due to insufficient interest from institutional investors.
"Rather than rushing to list, we decided to dispel market concerns and re-launch the IPO at an appropriate time," the company said at the time. “Even though the company’s profitability has improved, the stock offer price has not been well evaluated, due to excessive concerns about the shipping market and a weak investor demand for IPO subscriptions.”