In a strategic move aimed at enhancing operational efficiency, Mediterranean Shipping Company (MSC) and Zim have inked a vessel-sharing agreement (VSA) for the North Europe-Mediterranean Israel Express Service. This collaboration marks a significant step forward in streamlining logistics operations while strengthening the partnership between the two shipping giants.
Under this newly forged VSA, a fleet of five 6,700 TEU-type vessels will be deployed, with MSC operating three of these vessels. This partnership renews a relationship that Zim had previously enjoyed with MSC and its 2M alliance partner, Maersk, before the agreement was terminated in January 2022.
For Zim, this move comes amidst a broader restructuring of its liner network. The shipping company reported a second-quarter net loss of $213 million and reiterated its full-year guidance for an EBIT loss of up to $500 million. As part of its network overhaul, Zim has announced plans to suspend its Asia-Australia CAX service starting in October. Instead, it will be joining MSC’s Panda service.
Furthermore, Zim is set to replace its Oceania TFX and N2A loops with newly branded ZAO and ZOX services. These new services appear to involve slot charters on MSC’s Kiwi Express and Capricorn strings.
The VSA with MSC represents a positive development for Zim, as it seeks to reduce costs and enhance overall efficiency. This collaboration will not only bolster the company’s operational capabilities but also provide access to a wider network of ports and customers.
However, Zim faces the challenge of sub-letting its redundant vessels at a time when the tonnage market is experiencing oversupply. This could potentially pose difficulties in finding new employment for its ships. Nevertheless, Zim’s history of active involvement in the sub-let charter market suggests that it may successfully secure new opportunities for its vessels.
In summary, the newly established VSA with MSC is a significant milestone for Zim as it strives to boost cost-efficiency and competitiveness. These measures are essential as Zim undergoes restructuring to optimize its operations and navigate the dynamic global shipping landscape.