The future of the liner shipping industry took another step toward clarity with the Sept. 9 announcement of the formation of the Ocean Three, or O3, Alliance. The grouping will unite three carriers that until now had been unaffiliated with a major east-west alliance: CMA CGM, United Arab Shipping Co. and China Shipping Container Lines.

Most important about the formation of the O3 is that, with the exception of Zim Integrated Shipping Services, all traditional east-west carriers now are entrenched in alliances that cover all three east-west trades. That’s never happened, and, although the day-to-day impact may not be noticeable, it represents the next stage in the war for survival among carriers, and could have wider impact on the pricing of services.

Two of the three members of the newly announced O3 — UASC and China Shipping — have ships on order that are capable of carrying 19,000 20-foot-equivalent container units, giving alliance members access to large vessels. That will allow each of the alliance members, whether they own the ships or not, to share the cost benefits that come from their operation.

In the current environment, where pricing is commoditized, cost is king, and low cost means being better able to withstand what surely will be bouts of extreme rate volatility and almost certainly a long-term decline in rates. “To my mind, lowest cost will win,” Maersk Line CEO Soren Skou said in a JOC.com interview with Peter Leach.

But an alliance presents a framework for vessel ordering where consultation with partners becomes more critical. There is less room for individual decisions. Ships get ordered in part because of the needs of the alliance, not just the individual carrier. From a supply standpoint, then, alliances are a form of consolidation because capacity expansion plans to a large degree will be made on a group basis.

So, when “K” Line on Sept. 9 announced plans to order five 14,000-TEU ships for delivery in 2018, my first reaction was that those vessels eventually will get slotted in to CKYHE services, where all of the other carriers will gain in their economies of scale, just as “K” Line will gain benefits from larger ships ordered by its partners.

Unless carriers want to bring down the wrath of antitrust regulators, pricing will continue to be the province of individual carriers, but in a commodity pricing environment, rates can be impacted by supply decisions. Here, it’s not 20 carriers competing individually by dropping rates to maintain accounts, but rather four alliances — the O3, CKYHE, 2M and G6 — making joint decisions on deployments and temporary capacity adjustments. A sailing can’t be canceled, or “blanked” without the consent of all of the alliance partners because they each contractually have space on the ship.

So, as nearly all carriers form into alliances covering the full scope of east-west services, capacity decisions are being made by fewer entities. And, as they evolve into cohesive groupings — like alliances often do over time — this can only mean decisions such as those involving blank sailings that will impact supply and demand.

The question, then, is whether the unprecedented level of cooperation that exists with this alliance structure in fact will have a bearing on the market. Conventional wisdom says it won’t. No matter how many vessel-sharing agreements there are and have been on individual trade lanes, and given that east-west alliances have existed for years even if they don’t cover all markets, and even if not all carriers were involved, rates are volatile and reflect supply and demand. But if there are fewer entities deciding to blank sailings during periods such as the upcoming Golden Week in China, the road to achieving market impact may be a shorter one.

Whether shippers should be concerned about this is another matter. Shipper groups believe pricing collusion exists and have a right to be concerned to the extent this can be proven, and there’s been no proof of a carrier doing so recently.

But shippers also regularly bemoan rate volatility, because they prefer predictability in pricing and transit times from their transportation providers. If consolidation in the form of alliances makes the process of aligning supply and demand easier, that ought to improve the environment for customers.