CMA CGM braces for an even greater financial hit from French windfall tax
French MPs have amended a bill before parliament that would make a temporary windfall tax ...
Photo: VesselFinder
By Mike Wackett
2M alliance partners MSC and Maersk will revert to a reduced “winter schedule” coverage for Asia–North Europe until December to mitigate the impact of falling demand and the continued erosion of freight rates on the route.
From the end of this month, the 2M will blank the sailing of an Asia–North Europe loop for seven weeks.
MSC said it was “taking certain actions to adjust capacity in line with the slowing demand on the Asia to North Europe trade”, while Maersk added that its overall goal was “to provide our customers with predictability and to ensure minimal disruption to their supply chains by supplying alternative routings and coverage for the affected vessel positions”.
MSC said that, as an alternative for volume shippers, it could offer inducement calls at additional North Europe ports on non-blanked loops.
In detail, MSC and Maersk’s Griffin/AE55 loop will be blanked in weeks 43, 45 and 48, the Condor/AE7 string will be voided in weeks 44 and 46 and the Lion/AE6 service will not sail in weeks 47 and 49.
The huge blanking programmes of Asia–North Europe carriers either side of the Chinese Golden Week holiday proved ineffective in slowing the freight rate erosion that devalued prices by as much 50% in September.
Moreover, the substantial FAK rate hikes for 1 November announced by Hapag-Lloyd, CMA CGM and others last week have so far had little impact.
Indeed, only yesterday, The Loadstar received an unsolicited rate offer from a Shenzhen-based forwarding agent, quoting a price for a 40ft from Shanghai to Felixstowe, Rotterdam and Hamburg of between $620 and $655, valid from 18 October to 18 November, allegedly with shipment via Maersk sailings.
Meanwhile, with the worst possible timing, newbuild container vessels are flooding the market.
Some 190,000 teu of newbuild capacity was delivered last month, following 180,000 teu in August, 200,000 teu in July and an all-time record 300,000 teu that hit the water in June.
And this armada of mostly large container vessels leaving Asian shipyards is set to continue into next year, creating an increasingly worsening disconnect between supply and demand.
Indeed, MSC alone has an orderbook of 1.5m teu, with CMA CGM not far behind with orders for 1.3m teu of new vessels.
According to Alphaliner data, Geneva-headquartered MSC currently has an operating fleet of 5.4m teu and has widened the gap to Maersk to 1.3m teu, before orderbooks are taken into account.
MSC has already received two 24,000 teu ULCVs this month, but the newest arrival, the 24,346 teu MSC Micol, the consultant noted, was likely to be idled for three weeks until being phased into the 2M’s Lion/AE6 loop next month.
However, with the announcement today of the 2M’s winter programme, the ULCV could be in for an extended period at anchor.
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