Maersk Line is increasing the number of its ships and reducing port calls on the container routes between Asia and Europe. The new plan will ensure improved punctuality and is not merely a cut-cutting exercise, says a Maersk Line executive
Nearing peak season for container shipping, there are particularly concerning signs about the important shipping route, writes Seaintel, which also points out several possibilities for mitigating the situation.
Capacity on Asia-Europe will increase significantly in coming years, with a 13-percent rise in the fourth quarter 2017 alone. Carriers are forced to cancel sailings to avoid tipping the balance, writes SeaIntel. Otherwise they could see an end to the high rates currently experienced by the industry.
The container sector's main tradelane from Asia to North Europe is being serviced by ever-larger vessels. The 2M alliance with Maersk Line and MSC is at the forefront of this trend in which the biggest container vessels are deployed on Asia-Europe, forcing the already large vessels down onto the smaller trades, notes SeaIntel.
Spot rates on the key container tradelane Asia-Europe took a big dive last week, according to a survey from Drewry. The firm expects the rates to keep sliding as there is by now more space available for shippers.
The 2M alliance between MSC and Maersk Line will, starting April, increase its capacity on Asia-Europe by 25 percent, and the significant volume expansion could trigger rate disruptions, writes analyst firm Alphaliner in its latest newsletter.
Spot rates on the 11 major East-West routes between Asia and Europe climbed to a 20-month high this week, according to Drewry's World Container Index. Further rate increases are expected in the week to come.
Major container collaboration Ocean Alliance announced its service network on Thursday, which includes 40 services on the key east-west trades. CMA CGM will contribute 35 percent of the alliance's capacity.
Since 2012, the number of weekly services on the Asia - North Europe route has declined by 36 percent, and customers are having an increasingly difficult time keeping up, notes SeaIntel in a new analysis.
For the world's 30 largest container ports, 2016 looks set to be the worst year since the financial crisis in 2009, and growth on major services from the Far East to Europe is hovering at rock bottom, according to Alphaliner's review of recent data on the container sector.
The 2M alliance between Maersk Line and MSC will now target faster transit times and reliability with changes in the partnership's Asia-North Europe network. The move looks like a response to the new major container collaboration The Alliance, notes Drewry.
The container carrier finished the first quarter with a profit of USD 37 million. The Maersk Group as a whole delivered an underlying result of USD 214 million against USD 1.3 billion in the same period last year.
In spite of the major crisis among container carriers across the globe, the carriers have been unable to raise the price of transporting a twenty-foot container on the key route Asia-Europe for two months.
Shippers can currently transport a 20-foot container from the Far East to North Europe for about USD 100. This is how low some shipowners are willing to go in order to fill up vessels, Alphaliner writes.
Eight container carriers, which are financially vulnerable and several of which are facing acute liquidity issues, could be left behind if a new French-Chinese container alliance manages to change the entire scenario in the container sector and to challenge Maersk Line and MSC, notes Alphaliner.
Following Maersk Line's massive downgrade of its full-year 2015 forecast, the carrier's biggest global competitors are now following suit. One of the most expansive carrier's right now, United Arab Shipping Company, tells ShippingWatch that its bottom line is certain to finish in the red.
Announced price hikes from Maersk Line and its rivals on major shipping routes between Asia and Europe have found their way into rates on these routes, which have increased by a staggering 327 percent in the last week.
The two largest Korean container carriers are increasing their exposure to the container market. But this happens at a time when the two carriers do not have the financial resources to compete for real in a tough market, notes Alphaliner.
Anyone can sail from one port to another, so if Maersk Line wants to maintain its market share, the Danish juggernaut must compete on more than prices. Customer service must be paramount, the company’s Asia-Pacific CEO tells ShippingWatch.
Spot rates on the major container carriers' main vein, Asia-Europe, continue to dive in spite of the latest attempts at raising prices. The tradelane is in the final stages of the worst year since the financial crisis, says SeaIntel.
Container carriers are scrapping significantly fewer ships in 2015 than last year, primarily due to lower scrap prices and periodical surges in demand. But scrapping does not alleviate overcapacity on the main routes anyway, writes Drewry.