Home » Breaking News, Maritime » Maersk Line slashes capacity on Asia-Europe trade by 9%

Maersk Line, the world’s largest container shipping company, is cutting its vessel capacity on the Asia-Europe trade by 9 percent, citing the oversupply of container vessels on the lane for pushing its container freight rates to unsustainably low levels.

“With this adjustment we are able to reduce our Asia-Europe capacity and improve vessel utilisation without giving up any market share we have gained over the past two years. We will defend our market share position at any cost, while focusing on growing with the market and restoring profitability,” Søren Skou, Maersk Line CEO, said in a February 17 press release.

The 9 percent capacity reduction will be facilitated by a vessel-sharing agreement with the French container shipping line CMA-CGM.

“With this agreement, Maersk Line is able to remove 9% of its vessel capacity while still maintaining full and competitive coverage for its customers. In addition, the cooperation helps Maersk Line cut the cost of serving West Mediterranean markets, enabling Maersk Line to deploy its own vessels to areas where they are most needed as well as pursue further slow-steaming,” the company said.

A January report from shipping analyst Alphaliner predicted Europe-Far East container traffic growth would slow to 1.5 percent in 2012 from an estimated 2.8 percent in 2011 due to a weakening economic outlook in Europe. The industry container vessel fleet, by contrast, is set to grow by 8.3 percent in 2012.

“The Asia-Europe trade remains the world’s busiest trade lane, however, the supply of vessels currently operating on this trade simply outweighs the demand. We are therefore rationalising our service by taking out vessel capacity and thereby reducing costs,” says Vincent Clerc, chief product and yield officer for Maersk Line.

Maersk Line said it will also consider additional opportunities to reduce capacity, including redelivery of time charter tonnage, the use of lay-ups and slow-steaming. Additionally, it will not declare the option for the last 10 Triple-E vessels.

Under their vessel-sharing pact, Maersk Line and CMA CGM will merge their respective AE11 and MEX services into one new AE11/MEX (operating 12,500 TEUs per week) to cover the trade from the Far East to and from Spain, France, and Italy.

To cover the Mediterranean hubs, Maersk Line and CMA CGM will merge their announced AE20 and FAL9 services into a new AE20/MEX3 service, operating a weekly capacity of 9,500 TEUs. Maersk Line will further complement the coverage of its volume requirements in the Mediterranean hubs with the reinstatement of two port calls in Algeciras, Spain, on its North Europe Daily Maersk strings.

For its new AE11 service, Maersk Line’s AE11 service is merging with CMA-CGM’s MEX service and will continue to cover the Western Med, including Malta, Valencia, Barcelona, Fos Sur Mer and Genova.

The full rotation will be Qingdao, Busan, Shanghai, Ningbo, Yantian, Chiwan, Nansha, Tanjung Pelepas, Port Kelang, Malta,Valencia, Barcelona, Fos Sur Mer, Genoa, Malta, Khor Fakkan, Singapore.

The AE11 will start on the first week of April 2012 from Qingdao with a 12,500 TEU vessel.

The new AE20 service will have the following rotation: Xiamen, Shanghai, Ningbo, Yantian, Nansha, Tanjung Pelepas, Port Kelang, Beirut, Malta, Valencia, Malaga, Tangiers, Port Said, Port Kelang, Singapore.

The AE20 will have its first sailing on the last week of March 2012 from Xiamen with a 9,500-TEU ship.


Photo by Fischer, Silke for Maersk Line

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