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ONE, Cosco and OOCL are challenging their larger European competitors’ dominance in the South America-Europe reefer tradeby launching the joint Latin East-Coast Europe Express (LUX) service.

Marketed as ESE2 by Cosco and OOCL, the service focuses on moving South American refrigerated cargo and Linerlytica analyst Tan Hua Joo told The Loadstar it would be a new venture for ONE, which previously had relied on transhipment to serve this tradelane.

Mr Tan added: “Reefer volumes have not shown any significant growth, but LUX will challenge the dominance of the four main European carriers [MSC, Maersk Line, CMA CGM and Hapag-Lloyd] that have historically dominated this trade and control over 90% of the capacity on the route.”

Xeneta’s chief analyst, Peter Sand, told The Loadstar that from January to May, reefer volumes from the South American east coast to Europe fell by approximately 4% year on year. He said: “It’s not a very big trade, with less than 300,000 teu of reefers moved each year.

“Dry container volumes are also falling, and Xeneta’s spot rates on these trades are consistently falling too. [This new service] is not based on past performance.”

A spokesperson for ONE told The Loadstar the pan-Japanese line wanted to expand its reefer business, and South America-Europe route was one of its target markets.

The spokesperson added: “Our reputation in South America as a reliable reefer service provider is well known, especially for the trade between South America and Asia. With the LUX service, we will be able to offer our South American customers a broader range of services and expand our regional presence. Additionally, it will allow us to offer them faster transfer time to the Middle East and India, using Algeciras as a hub port.”

OOCL’s spokesperson told The Loadstar the Cosco subsidiary had been operating in the Latin American market since 2018, wanted to expand in the area and, since 2019, had been moving cargo between the South American west coast and Europe. The spokesperson described the new service as “a logical next step”.

LUX’s first sailing will be on 16 September, with Cosco’s 4,200 teu Xin Nan Tong departing Montevideo, while the reverse leg will see Cosco’s 4,051 teu Xin Chong Qing depart Rotterdam on 21 September.

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