The O3 container operators, CMA CGM, CSCL and UASC, have been forced to take the first concessions in the continuing Asia-Europe rate war, according to info from analysts Alphaliner.
The Alliance has taken the decision to withdraw one of their four Far East-North Europe strings for a period of 3 months starting from the end of June.
Alphaliner states the withdrwacel of is unprecedented as it coincides with the start of the summer season which normally runs from late June to early September on the Asia-Europe tradelanes.
“It appears that the rate war has taken a heavy toll on the ‘O3’ carriers, forcing them to take drastic action. Apart from the cost of idling the affected vessels, the carriers will also risk losing market share to their competitors, who stand to benefit from the cargo shifts away from ‘O3’, as well as the improved chances of securing part of a proposed general rate increase (GRI) scheduled on 1 July,” Alphaliner continues
According to the analysts figures, the O3 move will effectively remove approx 12,000 teu per week from the Far East – North Europe trade, representing about 20% of the ‘O3’ capacity and 4% of the total capacity on the route.
As a result, the carrier alliance may be forced to make the capacity cut permanent, as cargo volumes are unlikely to pick up in September to support the resumption of regular services.
Alphaliner concluded by stating the capacity removal may also be insufficient to ensure the success of the 1 July GRI, if other carriers do not match the ‘O3’ move with capacity cuts of their own
