Damco to be part of Maersk Line, and Seago and MCC merge with SeaLand
Damco’s supply chain services for Maersk Line are to be integrated into the carrier, and ...
The bellwether Shanghai Containerized Freight Index (SCFI) has experienced a relatively quiet week, with the North Europe component flat at $882 per teu and Mediterranean ports edging down $16 per teu to $887.
On the transpacific, spot rates gained 8.4% on the week for US west coast ports, to $1,685 per 40ft, and 3.3% for east coast ports, to $2,710 per 40ft.
Carriers serving both tradelanes have endeavoured to impose FAK and GRI increases to take advantage of peak season demand.
Those on Asia-North Europe are taking early action to mitigate the impact of the Chinese Golden Week holiday, and the following seasonal weaker demand, by preparing to blank sailings and suspend loops.
Golden Week takes place in the first week of October and generally marks the start of the slack season.
The 2M partners, Maersk Line and MSC, said the “temporary” suspension of one of their Asia-North Europe strings would help “match capacity with the weaker demand for shipping services in the early part of the second half of the year”.
MSC said the loop could be reinstated, “provided market demand recovers towards the end of the year”.
Meanwhile, Maersk Line said in a customer advisory it expected to “resume” the service in December, “subject to improved demand”.
It added: “We are currently reviewing our network, and details of the seasonally adjusted service offerings will be communicated as soon as they are ready.”
This suggests the 2M alliance will consider further service suspensions, depending on the strength of forward bookings and on how spot rates react post-peak season.
Maersk added that its aim was to have a “minimal impact on the business needs of our customers and your supply chain”.
However, Maersk, is under pressure to turn around a loss-making half year and so will be prepared to cull services at relatively short notice in order to swing the supply:demand ratio back in its favour.
Moreover, The Loadstar understands, the member carriers of the other two alliances are reviewing their respective forward booking prospects with a view to culling one or more Asia-North Europe loops.
Interestingly, Hapag-Lloyd advised this week that a THE Alliance sailing scheduled from Asia on 17 August would be void due to the vessel maintenance scheme for the NYK Vesta.
Unless there is a particularly urgent problem, these schemes can generally be rescheduled, and it is unusual for one to be programmed right in the middle of the peak season when load factors should be at their highest.
Not only do container lines need to ‘stop the rot’ and protect themselves from a potential freight rate meltdown in the second half of the year – this, after all, is effectively damage limitation in what increasingly looks like turning out to be a heavily loss-making year.
But they are also having to look a few months down the road, at negotiating new annual contract rates for the Asia-Europe trade, which are significantly influenced by the spot rate market.