Gemini partners Maersk and Hapag opt for ‘hub & spoke’ operation

Maersk and Hapag-Lloyd have formed the Gemini Cooperation, a new vessel-sharing alliance (VSA) that will adopt a ‘hub & spoke’ operation, moving away from direct port calls. This strategy aims to enhance schedule reliability, targeting a 90% reliability rate. The alliance will focus on using two to three main hubs per region, primarily in North Europe at Wilhelmshaven, Bremerhaven, and Rotterdam, supported by a network of dedicated feeder services.

For the hub & spoke model to succeed, Gemini must ensure that its relay network is resilient, with sufficient buffers to guarantee that exports and imports make connections. There must also be assurances from spoke and hub ports that feeder vessels will receive the same priority as mainline ships. However, the model’s success is contingent on overcoming potential delays, such as bad weather, which could create operational challenges at hub ports.

Despite the challenges, Maersk and Hapag-Lloyd believe that this approach will significantly improve reliability and interconnectivity compared to traditional setups. CEO Rolf Habben Jansen of Hapag-Lloyd acknowledged the need for a “step change in operational performance,” with current schedule reliability at just 54%. The partnership aims to address these issues, especially given the unwieldy nature of Hapag-Lloyd’s current alliance, THE Alliance.

Maersk, having decided to dissolve its 2M alliance with MSC, sees this partnership with Hapag-Lloyd as a “strong match” with a shared commitment to quality and reliability. Both companies are confident in their ability to meet their ambitious reliability targets, supported by a strong governance model and contractual obligations.

Key Point:

🔄 Shift to Hub & Spoke Model: The Gemini Cooperation, a new vessel-sharing alliance between Maersk and Hapag-Lloyd, has decided to adopt a ‘hub & spoke’ operation, which deviates from the current trend of direct port calls. This model centralizes operations around key hub ports, with smaller feeder ships connecting to spoke ports.
🚢 Importance of Network Resilience: For the hub & spoke model to succeed, the resilience of the Gemini relay network is crucial. Shippers must be convinced that the network has enough buffer capacity to ensure that both exports and imports are reliably connected.
⚓ Priority for Feeders: Gemini partners must secure assurances from both hub and spoke ports that feeder vessels will be given the same priority as mainline vessels. This is essential to prevent operational delays and ensure smooth connections.
⛴ Historical Challenges: The hub & spoke model has faced difficulties in the past. If feeders are delayed due to issues like bad weather or congestion, it can create significant operational challenges at the hub ports, where multiple ships may arrive simultaneously.
📅 Future Network Details: Maersk and Hapag-Lloyd have announced the VSA (Vessel Sharing Agreement) but have yet to disclose full details of their intended feeder network. These details, including schedules, will be unveiled later this year to inform customers and partners.
🗺 Hub Port Selection: The Gemini VSA plans to designate two to three main hub ports per region, which will be connected by a network of feeder services. For instance, in Northern Europe, the hubs will include Wilhelmshaven, Bremerhaven, and Rotterdam, served by 14 feeder routes.
📈 Improved Schedule Reliability: The hub & spoke model is expected to significantly enhance schedule reliability. Hapag-Lloyd, in particular, aims to improve its operational performance, as its current schedule reliability stands at 54%, with ambitions to reach 90%.
🔗 Challenges within THE Alliance: Hapag-Lloyd’s experience with THE Alliance, which includes carriers headquartered in Asia, has been less successful in achieving desired schedule integrity. The Gemini alliance is seen as more compatible and efficient.
🤝 Maersk and Hapag-Lloyd Partnership: Maersk, after ending its 2M alliance with MSC, has found a “strong match” in Hapag-Lloyd, valuing their shared business culture and commitment to high schedule reliability.
🎯 Ambitious Schedule Reliability Goal: Both Maersk and Hapag-Lloyd are committed to achieving a 90% schedule reliability, backed by a robust governance model and contractual commitments. This marks a significant shift towards improving operational consistency.

Full article: https://theloadstar.com/gemini-partners-maersk-and-hapag-opt-for-hub-spoke-operation/