The battle of the big ships appears to have claimed one of its first casualties as Israeli flag carrier Zim Integrated Shipping reportedly has decided to exit from the Asia-North Europe trade for lack of the mega ships needed to compete on the east-west loop.
Zim CEO Rafi Danieli said the company intends to concentrate its coverage and expand its services on the South America trades instead.
Confirmed group vice president Nissim Yochai: “In fact, we are thinking of adding another vessel to our line from South America to the Far East.
“This is a trade where there is an obvious advantage for the bigger vessels,” continued Yochai, referring to the Asia-Europe trade, as he noted that the carrier’s biggest ships are only in the 10,062-TEU range.
“We don’t have the 14,000-TEU to 18,000-TEU vessels that will allow us to compete on even terms with the big guys,” he added.
Zim had been offering services on the trade in a joint service with China Shipping Container Lines until the end of April when CSCL opted to go solo.
Just last month, the box ship reported a net loss in the first quarter of 2014 of US$62 million, a reduction of 45 percent compared with the same quarter last year.
It also announced it has finalized an over $3-billion debt restructuring plan that includes a $1.4 billion debt equity swap with creditors. The substantial debt reduction, along with the injection of new equity, would allow the carrier to compete successfully in the global shipping market, it had said.
