Returning chartered ships early puts an expensive dampener on Yang Ming results
Yang Ming today posted a net loss of $139m for 2019, as a 4% increase ...
The G6 Alliance has announced that it will “temporarily suspend” its Atlantic Express 4 (AX4) weekly service from mid-November until April.
The news follows Maersk Line and MSC’s announcement this week of the suspension of their ATL4/NEUATL4 transatlantic service, reducing the 2M Alliance offering on the trade from four services to three.
Maersk said in a customer advisory this week it would launch an ATL New Work service calling Bremerhaven, Rotterdam and New York, downgrading the usual four 4,300-4,800 teu vessels to three ships of a so far undeclared capacity.
Meanwhile, the last sailing of the AX4 service between Bremerhaven, Rotterdam, Le Havre, New York and Savannah will be the 2,732 teu Colette on November 18 from the German port.
Both alliances appear to have sought to readdress a possible gap in coverage of Savannah, with the 2M partners adding a call at the port to its ATL3/NEUATL3 service. The G6 alliance said it would provide additional westbound calls to Savannah on its AX1 and AX3 loops.
Details of the enhanced coverage on the AX1 and AX3 loops have yet to be published, but it seems unlikely the revised itinerary will meet the current 12-day transit from Rotterdam to Savannah.
Notwithstanding the “seasonal changes in market demand” that led to the AX4 suspension, the normally robust transatlantic trade is suffering decreased vessel utilisation levels on the eastbound leg due to weak European demand, attributed mainly to the euro’s depreciation against the US dollar.
According to PIERS data, in the 12-month period ending March 31, volumes increased by 3.5% year-on-year to 4.7m teu on the US westbound transatlantic route, while eastbound liftings declined 4.6% to 1.9m teu.
Drewry Maritime Advisors said the route had received a “huge” injection of capacity since May, which, it said, would bring “a predictable outcome for freight rates”.
Spot rates between New York and Rotterdam have crashed this year from a January level of around $1,200 per feu to the current record low of about $600 per feu, further worsening the returns for carriers on what was normally regarded as one of the few balanced shipping trades in the world.
Elsewhere, shippers are preparing for a period of extensive voyage cancellations and probably more service suspensions on weak demand routes – whether they are temporary or permanent – as container lines enter the traditional “slack season”.
Carriers are now looking to “batten down the hatches and ride out the storm” in the hope that the Chinese New Year (year of the monkey), which falls early next year – on February 8 – will bring a few weeks of strong demand ahead of the factory shutdowns.