CHINA: Maersk merges to cut 9% on Europe–China tonnage
21.02.2012, 19:19Oversupply of container vessels operating on the Asia–Europe trade lane has pushed Danish Maersk Line's container freight rates to unsustainably low levels. In order to rationalise its service, Maersk Line is removing 9% of its vessel capacity currently operating on the Asia–Europe trade.
"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," says Maersk Line's CEO Søren Skou in a communiqué.
Maersk Line is in a silent period until 27 February when the parent company, AP Moller-Maersk, will present the 2011 result.
The 9% 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. The cutback will especially affect West Mediterranean ports of call, enabling Maersk Line to deploy its own vessels to areas where they are most needed as well as pursue further slow-steaming.
Maersk Line and CMA-CGM will merge their respective AE11 and MEX services into one new AE11/MEX (operating 12500 TEU 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 TEU.
A January report from Alphaliner shipping analyst predicted Europe–Far East container traffic growth would slow to 1.5% in 2012 from an estimated 2.8% in 2011, due to a weakening economic outlook in Europe. The industry container ves-sel fleet, by contrast, is set to grow by 8.3% in 2012.
Where commercially appropriate, Maersk Line will also consider additional opportunities to reduce capacity, including redelivery of time charter tonnage, the use of lay-ups and slow-steaming. Additionally and in line with previous guidance, Maersk Line will not declare the option for the last ten Triple-E vessels.