Shippers are starting to counterpunch against the blows that have sent General Maritime ( GMRRQ , quote ) into bankruptcy and Frontier Ltd ( FRO , quote) and the exchange-traded fund for the industry, Guggenheim Shipping ( SEA , quote ), to their lowest points of the year.
The plight of the shipping industry has been detailed on many previous articles on www.emergingmoney.com .
In an article in the Financial Times by Robin Wright, "Shipping group urges other lines to join alliance," it was detailed how the Mediterranean Shipping Company, the second largest container shipping line, was structuring "audacious plans to become the world's most powerful force, by inviting further lines to join an alliance."
CMA CGM, operator of the third largest shipper in the world, has already joined the alliance, according to Wright's piece in the Financial Times . Together, Mediterranean Shipping Company and CMA GM will control 21.7% of the container fleet.
As reported in the Financial Times, "The pair have formed the alliance amid a glut of container ship capacity that has pushed nearly every big operator deep into loss and forced a number to raise capital or reconsider their future in shipping."
As reported in a previous article on www.emergingmoney.com , carriers are already reducing capacity for the Asia-Europe route. Recent results from the third quarter of 2011 from CMA CGM underscore the crisis for shippers as it suffered a net loss of $223 million on $3.86 billion in revenue.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.