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More deepsea carriers have announced plans to cut capacity on the Asia-Europe trade in preparation for a slowdown in volumes after the summer peak season.
2M partner MSC today said it would suspend one of its Asia-Europe services after the end of China’s Golden Week holiday, which begins on 1 October.
It said: “Due to the anticipated slowdown in demand, Mediterranean Shipping Company plans to make a temporary structural adjustment to its Asia-Europe network around the end of the third quarter/early in the fourth quarter of 2018.
“The change will help us to match capacity with the expected weaker market demand for shipping services in the early part of the second half of the year.
“MSC plans to suspend one of its Asia-Europe services during this period, with a view to restoring the service, provided that market demand recovers towards the end of the year.”
Also today, Hapag-Lloyd announced that the 17 August sailing of THE Alliance’s Far East-Europe Loop 1 service will be cancelled, as the ship – the 9,000 teu NYK Vesta – is scheduled to be removed from service as part of the grouping’s vessel maintenance scheme.
A couple of weeks ago, the Ocean Alliance indicated it was preparing to trim capacity and announced the cancellation of a July sailing of its WM1 Asia-West Mediterranean service.
Alliance member OOCL said the move was “in response to the expected low demand in the West Mediterranean during the summer holiday period”.
Eastbound freight rates on the Asia-North Europe and Asia-Mediterranean have remained in the $800-900 bracket for several weeks, although carriers have been looking to push for higher pricing for the next quarter through peak season surcharges and the continuation of emergency bunker levies.
Comment on this article
A.Kout
July 09, 2018 at 2:59 pmThis is fully understandable and logic to us. In light of the drama the trade war between Mr.Trump and China etc we expect that from end of aug where the
peak season normally starts the availibilty of cargo will be reduced, which
immediately have an deep impact on rates and margins. Freight Forwarders
who have contracted for a longer period dedicated charters,(air),made larger ocean
allotments/allocations will be in deep trouble as industry shippers will automactically
use this as their tool to achieve and drop rates to a submarginal level.
We deeply doubt that the dedicted charters etc. can be adapted to
the market volume availability starting from end of Aug to end of Nov.2018.
Maybe we are totally wrong on this, however we are warning since months on this
possible upcoming situation, which can have a deep influence on balances of
freight forwarders for the BY 2018. regards A.Kout