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MSC has inked its second vessel-sharing agreement (VSA) with Zim in the space of a week, the Israeli carrier becoming a ship provider for the North Europe-Mediterranean Israel Express Service.

Commencing this week, the new VSA will deploy five 6,700 teu-type vessels, of which MSC will operate three.

The news comes from an MSC customer advisory, but is yet to be officially confirmed by Zim.

According to MSC, the updated rotation of the Israel Express Service will be: London Gateway-Rotterdam-Hamburg-Antwerp-Le Havre-Ashdod-Haifa-Damietta-Valencia-London Gateway.

The cooperation on the route renews a partnership Zim had enjoyed with MSC and its 2M partner Maersk, until it was terminated in January 2022, obliging the Israeli carrier to make other arrangements to cover commitments.

Zim is in the process of restructuring its liner network, after suffering a second-quarter net loss of $213m and reaffirming its full-year guidance for an ebit loss of up to $500m.

In June, the Haifa-based carrier terminated its Asia-US west coast services to concentrate on the more lucrative Asia to the US east coast route, where it still operates, in conjunction with the 2M Alliance.

Last week Zim announced it was suspending its Asia-Australia CAX service from October and, subject to regulatory approval, joining MSC’s Panda service, contributing three 5,000 nominal teu ships to the seven-vessel loop.

The carrier also said it was replacing its Oceania TFX and N2A loops with newly branded ZAO and ZOX services, which appear to be slot charters on MSC’s Kiwi Express and Capricorn strings.

Zim’s EVP for intra-Asia, Danny Hoffman, said that the move represented an “exciting new phase” for the carrier. He explained: “Our current Oceania services network will be restructured in cooperation with MSC to enhance reliability and strengthen our customer offerings.”

It was noted by Alphaliner, following the agreement with MSC, that Zim would need to find new employment for around ten 2,500-2,800 teu chartered-in vessels that currently operate on the soon-to-be-discontinued Oceania loops.

The carrier has, in fact, recently been extremely active in the sub-let charter market, successfully re-letting surplus ships to mitigate the  daily hire liabilities it has with vessel owners.

However, the demand for tonnage, particularly in the smaller sizes, has pivoted to an over-supplied position in the past few weeks, meaning that Zim could now find sub-letting its redundant ships more of a challenge.

According to Alphaliner data, Zim is ranked 10th in the container line league table, with capacity of 568,577 teu on 130 ships, of which only nine ships are owned by the carrier. Moreover, Zim has a large orderbook, of 38 long-term charter vessels with a nominal capacity of 306,184 teu.

Therefore, in the absence of market-share growth, it will need to redeliver or sub-let a significant amount of its existing chartered tonnage to accommodate the arrival of the newbuilds.

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