Cathay Pacific back to business-as-usual soon as aircraft return
Cathay Pacific will be operating all its aircraft again by the end of next year, ...
The G6 alliance is to extend its weekly blanking of westbound Asia-Europe voyages until the end of December.
The carrier blames continuing soft cargo forecasts and oscillating rate levels and will void 10 scheduled sailings between weeks 43 and 53.
The move follows the G6’s announcement on 18 August that it was cancelling a further four sailings between weeks 40 and 43.
And there could be more blanked voyages to come, the G6 bleakly warned.
The strategy of both the six-member G6 vessel sharing agreement and rival CKYHE alliance has been to blank sailings to mitigate the downturn in demand for Asian imports in Europe. In contrast, the 2M and Ocean alliances have announced the withdrawal of entire strings.
Indeed, Maersk Line said last week it was considering cutting another “two-to-four strings in the fourth quarter”, due to weak demand and disappointing vessel utilisation levels, which suggests that this cull could include at least one more Asia to Europe service.
Drewry Maritime Research calculates that the 2M and O3 service suspensions will result in 22 ships seeking new employment. And the latest announcement by the G6 is likely to extend the lay-up of five vessels of between 8,500 and 13,900 teu idled by the alliance members.
Meanwhile, the current supply-demand imbalance on the Asia-Europe trades means “carriers are having to be more creative when deciding where to deploy smaller deliveries”, said Drewry.
It said the 360,000 teu combined capacity of 8,000-10,000 teu vessels delivered between January and August this year had joined nine different lanes, which had caused a “significant upsizing” of the largest vessels deployed on those routes. In some cases, such as the Asia-east coast South America corridor, it said “this goes some way to explaining the rapid fall-off in spot rates”.
Drewry said: “It is a delicate balancing act, and one that carriers cannot win all of the time, but by distributing the new ships widely they do at least give themselves the chance of maintaining some level of balance.
“Ultimately though, the equation is unsolvable as there is simply not enough cargo to fill all of the ships.”
Significantly, all the 10,000 teu-plus newbuilds received by carriers in the first eight months of this year have been deployed on the Asia-Europe trade, and these vessels, particularly the ultra-large container vessels (ULCVs), are restricted by their “inflexibility” – being too big to operate on all trades.
“Carriers are fearful of being left behind in the race for ULCVs,” said Drewry, but added that “the value of having a smaller, but more flexible, fleet in a slowing market should not be overlooked”.
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