Older freighters look set for the scrap heap as capacity oversupply looms
Aged freighters are destined for scrappage, with the raft of new orders set to hit ...
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By Mike Wackett
After announcing last week that the joint AE9/Condor Asia- North Europe service is to be withdrawn in mid-September to become a seasonal service only, 2M partners Maersk Line and MSC today published a revised east-west network which also includes three new port calls.
The ports added to the network are Haifa, Israel (on the AE12/Phoenix service), Prince Rupert, Canada (TP8/New Orient) and the Turkish hub port of AsyaPort (AE15/Tiger).
Maersk said the revised network will take effect from mid-September, with the number of vessels deployed increasing from 193 to 208 and the number of strings increasing from 23 to 24, which includes the ‘seasonal’ AE9/Condor service.
The overall number of port calls jumps from 212 to 291, with direct port-to-port pairs at 1,036 against the previous 788, advised Maersk.
The Danish carrier claimed that after seven months since the launch of the 2M east-west network its goal of offering its customers “reliable, flexible and direct services” had been achieved, “but we can do even better” it said hence it was making “some operational changes”.
In comparison, MSC did not provide a start date for the revised schedules, but said “information regarding the implementation of these changes will be communicated in due course” although in an earlier message on 13 August it said the network changes would “be fully effective by quarter four 2015”.
The 2M alliance was the final vessel sharing agreement to confirm it was cutting capacity on the troubled Asia-North Europe trade after Maersk and MSC announced last Thursday the AE9/Condor suspension, relegating the string to a “seasonal service if there is sufficient demand”.
According to DynaLiners, the combined service postponements of the four alliances mean that the total number of weekly slots removed from the route now stands at 46,900 teu, reflecting the weak demand.
Carriers will now hope that the extreme rate volatility experienced in the past few months will ease and that a reasonable quantum of the proposed 1 September general rate increases (GRIs) will hold.
Meanwhile, last week saw the Shanghai Containerized Freight Index (SCFI) fall by $193 per teu from Asia-North Europe to $640 representing a 42% decline in just the past two weeks.
London-based container derivatives broker FIS said that year-to-date spot rates are now on average 47% lower than the corresponding period of 2014, and noted that even Maersk Line was “unable to fully protect itself from the most recent decline in freight rates”.
Last week Maersk reported a 14% year-on-year decline in average rates during the second quarter of the year, resulting in a $639m reduction in its revenue, which came despite a 3.7% hike in its volume to 5m teu.
During its second quarter results presentation last week, group chief executive Nils Andersen admitted that the carrier had “overestimated the market growth” and that Maersk Line “needed to take the proper capacity decision”.
It was a message reiterated the following day by Maersk Line chief executive Soren Skou who pledged to “reduce capacity to match market demand”.
Sources have suggested to The Loadstar that Maersk had been keen to remove one Asia-North Europe string, but needed the agreement of its 2M partner which had preferred the option taken in June of a less radical downsizing of the ships deployed on the route.
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