2M cancels Asia-north Europe sailing in March to hold up rates
2M shipping alliance partners Maersk Line and Mediterranean Shipping Company (MSC) are to shelve another Asia-north Europe sailing at the beginning of March owing to weaker-than-expected demand
2M shipping alliance partners Maersk Line and Mediterranean Shipping Company (MSC) are to shelve another Asia-north Europe sailing at the beginning of March owing to weaker-than-expected demand.
The 14,500 TEU Estelle Maersk, deployed on the AE2/Swan service, was scheduled to begin its westbound loading programme at Qingdao, China on March 2 but will now be held at anchor, reported London's Loadstar.
In the aftermath of announcing their Chinese New Year blanking programme, the 2M partners took an 11-hour decision to cancel the sailing of the 19,437 TEU MSC Eloane last week, suggesting that the recovery of bookings after the CNY was proving especially challenging.
Maersk was quoted as saying that it 'endeavoured to balance our network to match reduced demand'.
'This is an additional blank sailing,' said the carrier, 'we aim to minimise the impact to our customers by securing alternative routings wherever possible.'
The Ocean and THE alliances are likely to announce similar moves, cancelling more sailings to support spot rates which dropped by six per cent to north Europe in the first week after the Chinese New Year holiday shutdown.
One carrier told London?s Loadstar last week its forward bookings from Asia to north Europe were 'particularly disappointing' and that he 'feared a bloodbath' on rates.
Indeed, Global Port Tracker noted in January that the prospect of a recession in parts of north Europe will have a negative impact on headhaul carryings in the coming months, as consumers decide to defer non-essential purchases and retailers respond with lower inventories.
Port Tracker said that although it was 'not predicting a full-blown recession' in north Europe, it did expect stagnation, 'leading to a mild downturn.'
But even a 'mild downturn' in demand could prove disastrous for the shipping lines given that they collectively plan to inject 28,000 TEU of extra capacity a week from April into this trade lane, raising the capacity deployed in total by the three mega shipping alliances competing on this route to 300,000 TEU.
The capacity growth comes mainly from Ocean Alliance members who will commence an extra seventh Asia-north Europe string from April, a decision triggered by the delivery of 12 newbuild mega ships to Cosco.
The Ocean is also upsizing another of its loops with larger vessels, while THE Alliance plans to upsize its FE5 string in March from 10,000 TEU to 14,000 TEU ships.
As for Hyundai Merchant Marine (HMM), it intends to replace its existing fleet of twelve 4,700-5,100 TEU vessels on its standalone Asia-north Europe service with vessels in the 6,300-6,800 TEU range, starting from May.
The South Korean carrier, which suffered a loss of US$720 million in 2018, also plans to deploy twelve 23,000 TEU containerships on the trade lane from the second quarter of 2020.