Loss-making liner operator Zim is looking to turn around its fortunes through an operational cooperation with MSC Mediterranean Shipping Company.
The agreement between the Israeli carrier and the world’s largest liner operator includes vessel sharing, slot purchases, and swap arrangements on several trades.
The carriers will cooperate on services connecting the Indian subcontinent with the east Mediterranean, the east Mediterranean with northern Europe, and services connecting East Asia with Oceania.
Zim president and chief executive Eli Glickman said the partnership is “a mutually beneficial arrangement, delivering cost efficiencies for both carriers”.
He said it would significantly enhance operational efficiencies and elevate service levels.
Haifa-based Zim has cooperated closely with MSC and its 2M alliance partner AP-Moller Maersk for several years, but the Danish carrier is not participating in the latest agreement.
The Israeli company currently partners MSC on trades comprising Asia, the Pacific Northwest, Oceania, India, east Mediterranean, and northern Europe.
The new partnership comes at a crucial time for Zim, which is suffering from heavy losses from a decline in freight rates.
In August, the carrier posted a net loss of $213m for the second quarter of the year.
The carrier is looking to turn around those losses by cutting costs by, among other measures, reletting ships that are surplus to requirements.
“Our agile strategy enabled us once again to promptly adapt to changing market dynamics, ensuring that we continue to best meet our customers’ needs with our signature personalised service, supported by cutting-edge digital tools,” Glickman said.
“Capitalising on this opportunity with MSC will improve efficiencies in our fleet and is consistent with our focus on taking proactive steps amidst continued near-term headwinds in the container shipping market.
“We expect that this strategic cooperation will benefit Zim both operationally and financially, and it is another testament to our agility.”
For the first half of 2023, Zim posted a net loss of $271m, down from $3.05bn in net profit for the first six months of 2022.
Revenue totalled $2.86bn for the first half of 2023, down from $4.63bn in revenue collected during the first half of 2022.