MEMBERS of the G6 Alliance – APL, Hapag-Lloyd, Hyundai, MOL, NYK and OOCL – will cancel more Asia-Europe sailings as demand slackens at the end of the peak season. The carrier blames continuing soft cargo forecasts and oscillating rate levels and will void 10 scheduled sailings between weeks 43 and 53.
The strategy of both the six-member G6 vessel sharing agreement and rival CKYHE alliance has been to blank sailings to mitigate the downturn in demand for Asian imports in Europe. In contrast, the 2M and Ocean alliances have announced the withdrawal of entire strings.
Indeed, Maersk Line said last week it was considering cutting another “two-to-four strings in the fourth quarter”, due to weak demand and disappointing vessel utilisation levels, which suggests that this cull could include at least one more Asia to Europe service.
Drewry Maritime Research calculates that the 2M and O3 service suspensions will result in 22 ships seeking new employment. And the latest announcement by the G6 is likely to extend the lay-up of five vessels of between 8,500 and 13,900 teu idled by the alliance members.
Loop 1 service in week 53, westbound ETA Kobe 2 January 2016
Loop 4 service in week 46 and 50, westbound ETA Ningbo, 13 November and 11 December 2015. The westbound Le Havre call will be covered by Loop 6 in the respective week. “Kaohsiung will be added as a westbound call, while Jebel Ali will be inserted on the eastbound leg of Loop 7. The westbound Colombo and Xiamen calls will be added into Loop 4,” said the G6 statement.
Loop 5 service in week 47 and 51, westbound ETA Kwangyang, 20 November and 18 December 2015. The westbound Kwangyang and Busan calls will be added in Loop 7 in the respective week.
“Loop 6 service in week 44, 48 and 52, westbound ETA Fuzhou, 29 October, 26 November and 24 December 2015,” said the press release dated September 14.
Loop 7 service in week 45 and 49, westbound ETA Qingdao, 2 November and 30 November 2015 Qingdao will be added to Loop 4 on the westbound leg in the corresponding week, while Gdansk, Gothenburg and Antwerp calls being covered by Loop 5 on the eastbound direction during the same timeframe, it said.
In a statement the G6 members announced “the Alliance continues to offer a variety of services between Asia and Europe covering all major port pairs with weekly sailings, and to make further service adjustments where necessary,”
Meanwhile Drewry said the current supply-demand imbalance on the Asia-Europe trades means “carriers are having to be more creative when deciding where to deploy smaller deliveries”.
Drewry stated the 360,000 teu combined capacity of 8,000-10,000 teu vessels delivered between January and August this year had joined nine different lanes, which had caused a “significant upsizing” of the largest vessels deployed on those routes. In some cases, such as the Asia-east coast South America corridor, it said “this goes some way to explaining the rapid fall-off in spot rates”.
“It is a delicate balancing act, and one that carriers cannot win all of the time, but by distributing the new ships widely they do at least give themselves the chance of maintaining some level of balance. “Ultimately though, the equation is unsolvable as there is simply not enough cargo to fill all of the ships.”
Significantly, all the 10,000 teu-plus newbuilds received by carriers in the first eight months of this year have been deployed on the Asia-Europe trade, and these vessels, particularly the ultra-large container vessels (ULCVs), are restricted by their “inflexibility” – being too big to operate on all trades.
“Carriers are fearful of being left behind in the race for ULCVs,” said Drewry, but added that “the value of having a smaller, but more flexible, fleet in a slowing market should not be overlooked”.