THE Alliance to set up contingency fund

THE Alliance Agreement is establishing a USD 50 million contingency fund that can be used to help member carriers manage through, and recover from, the insolvency or financial distress of a participating line.

The US Federal Maritime Commission allowed and submitted on August 14 the amendment to THE Alliance agreement, granting the request of petitioning parties for an expedited review. The amendment is effective immediately.

As informed, crucial for the decision was last year’s bankruptcy of Hanjin Shipping, acting as a wake-up call for the entire ocean transportation and logistics chain.

    ‘THE Alliance sought this amendment to address marketplace issues and consumer concerns. This amendment reflects the market process in action,’ stated Federal Maritime Commission Acting Chairman Michael Khouri.

THE Alliance Agreement is comprised of five container shipping lines: Hapag-Lloyd, K Line, MOL, NYK, and Yang Ming. Under the terms of the agreement, THE Alliance members are permitted to share vessels, charter and exchange space on each other’s ships, and enter into cooperative working arrangements.