Life on Asia-Europe tradelanes: longer transits, fewer sailings, reduced capacity
Further evidence that Asia-North Europe shippers now have fewer booking options and must live with ...
Maersk Line and MSC have been obliged to blank a further Asia-North Europe 2M loop at the beginning of next month due to weaker-than-expected demand prospects.
The 14,500 teu Estelle Maersk (pictured above), deployed on the 2M’s AE2/Swan service, was scheduled to begin its westbound loading programme at Qingdao, China, on 2 March, but will now be held at anchor.
And after announcing their Chinese New Year blanking programme, the 2M partners took an eleventh-hour decision to withdraw the sailing of the 19,437 teu MSC Eloane last week, suggesting that the recovery of bookings after the CNY was proving especially challenging.
Maersk said today it had “endeavoured to balance our network to match reduced demand”.
“This is an additional blank sailing,” said the carrier, “we aim to minimise the impact to our customers by securing alternative routings wherever possible.”
The Ocean and THE alliances are expected to announce similar radical action, voiding more sailings to support spot rates which fell by almost 6% to North Europe in the first week after the CNY holiday shutdown.
One carrier told The Loadstar last week its forward bookings from Asia to North Europe were “particularly disappointing”, and that he “feared a bloodbath” on rates.
Indeed, according to January’s edition of the Global Port Tracker, the prospect of a recession in parts of North Europe will have a negative impact on headhaul carryings in the coming months, as consumers decide to defer non-essential purchases and retailers respond with lower inventories.
The Tracker said that, although it was “not predicting a full-blown recession” in North Europe, it did expect to see stagnation, “leading to a mild downturn”.
But even a “mild downturn” in demand could be a disaster for carriers on the route, given that they are collectively planning to inject 28,000 teu of extra capacity a week from April, to hit a combined offering from the three alliances of around 300,000 teu.
The capacity growth comes mainly from Ocean Alliance members who will launch an additional seventh Asia-North Europe string from April, prompted by the delivery of 12 newbuild ULCVs to Cosco.
The Ocean is also upsizing another of its loops with larger vessels, while THE Alliance is planning to upsize its FE5 string next month from 10,000 teu to 14,000 teu ships.
On a much smaller scale, HMM is planning to replace the current fleet of 12 panamax 4,700-5,100 teu vessels on its standalone Asia-North Europe service with vessels in the 6,300-6,800 teu range from May. The South Korean carrier, which last week announced a loss of $720m for 2018, also plans to introduce 12 23,000 teu newbuild ships on the tradelane from the second quarter of next year.
Maersk subsidiary Hamburg Süd, which also had containers booked on the 2M blanked sailings, has been “advised” of the latest sailing cancellation, but slot charter HMM has apparently yet to be officially told.