Container lines calling in New Zealand are preparing to remove tonnage as part of a major shake-up of services after a slump in freight rates. Step one involves Maersk Line that has formed a vessel sharing agreement with Malaysia’s MISC Berhad.
However, MISC will remain a member of the New Zealand Express, a consortium of five lines that is about to unveil details of a capacity rationalisation programme.
Singapore’s Pacific International Lines, Japanese lines MOL and NYK, Hong Kong carrier OOCL, plus MISC, are understood to be finalising plans to reduce their two services between southeast Asia and New Zealand to a single loop. But while that new arrangement has not yet been completed, Maersk and MISC are ready to move ahead with their new collaboration. The Danish line will charter one of the four 4,100 teu ships it currently deploys in its southeast Asia-New Zealand rotation to MISC as part of a new ship sharing arrangement designed to improve capacity utilisation and financial returns.
The route has been swamped by too much tonnage that has pushed freight rates below those on routes to Australia, despite higher slot costs because of the longer distance and the need often to deploy more ships. Soaring fuel prices are adding to the challenge of operating services to New Zealand and the need to chop costs.
Maersk Line’s service will remain unchanged despite the co-operation with MISC. Port rotation will be Tanjung Pelepas, Singapore, Brisbane, the two New Zealand ports of Auckland, and Port Chalmers, and back to Malaysia.
At one stage, the six lines now redesigning their services were discussing the possibility of all working together, but when that proved too complicated, Maersk and MISC went ahead with their separate agreement. Maersk also operates an extensive feeder network around New Zealand that had to be taken into consideration when deciding what action to take. The changes “are a reflection of the presently unsustainable trading conditions in the sourtheast Asia-New Zealand market,” Maersk Line said in a statement.
Traditionally, freight rates to New Zealand have been some 20% above corresponding levels for Australia, but that is no longer the case, according to Nicolaj Noes, trade manager in charge of Maersk Line’s oceanic routes. The ships deployed on this route are designed to carry a large amount of refrigerated cargo, but lines also have to contend with highly seasonal trades that add to costs. For Maersk, this latest vessel sharing agreement follows an extraordinary few weeks that has seen the world’s largest container line team up with competitors in trades around the world as it takes action to improve operating efficiencies and return to a healthy level of profits.
Possibly the biggest surprise was the decision to share ships with Mediterranean Shipping Co and CMA CGM on the Pacific, while Maersk is also selling slots to CMA CGM on the Atlantic and exchanging space with Evergreen in the Asia-Europe trades. Although the early weeks of 2008 saw a slowdown in growth on the Asia to Europe corridor, volumes are still expanding enough to justify the arrival of more capacity.The Grand Alliance last week announced a new service, a fifth string connecting Asia with northern Europe that starts this week.
The new EU5 service will be run with eight 5,500 teu units and will include calls at Amsterdam, the facility owned by Grand Alliance member NYK. Other ports in the rotation will be Hamburg, Southampton, Singapore, Shanghai, Ningbo, Xiamen and Singapore.
However, MISC will remain a member of the New Zealand Express, a consortium of five lines that is about to unveil details of a capacity rationalisation programme.
Singapore’s Pacific International Lines, Japanese lines MOL and NYK, Hong Kong carrier OOCL, plus MISC, are understood to be finalising plans to reduce their two services between southeast Asia and New Zealand to a single loop. But while that new arrangement has not yet been completed, Maersk and MISC are ready to move ahead with their new collaboration. The Danish line will charter one of the four 4,100 teu ships it currently deploys in its southeast Asia-New Zealand rotation to MISC as part of a new ship sharing arrangement designed to improve capacity utilisation and financial returns.
The route has been swamped by too much tonnage that has pushed freight rates below those on routes to Australia, despite higher slot costs because of the longer distance and the need often to deploy more ships. Soaring fuel prices are adding to the challenge of operating services to New Zealand and the need to chop costs.
Maersk Line’s service will remain unchanged despite the co-operation with MISC. Port rotation will be Tanjung Pelepas, Singapore, Brisbane, the two New Zealand ports of Auckland, and Port Chalmers, and back to Malaysia.
At one stage, the six lines now redesigning their services were discussing the possibility of all working together, but when that proved too complicated, Maersk and MISC went ahead with their separate agreement. Maersk also operates an extensive feeder network around New Zealand that had to be taken into consideration when deciding what action to take. The changes “are a reflection of the presently unsustainable trading conditions in the sourtheast Asia-New Zealand market,” Maersk Line said in a statement.
Traditionally, freight rates to New Zealand have been some 20% above corresponding levels for Australia, but that is no longer the case, according to Nicolaj Noes, trade manager in charge of Maersk Line’s oceanic routes. The ships deployed on this route are designed to carry a large amount of refrigerated cargo, but lines also have to contend with highly seasonal trades that add to costs. For Maersk, this latest vessel sharing agreement follows an extraordinary few weeks that has seen the world’s largest container line team up with competitors in trades around the world as it takes action to improve operating efficiencies and return to a healthy level of profits.
Possibly the biggest surprise was the decision to share ships with Mediterranean Shipping Co and CMA CGM on the Pacific, while Maersk is also selling slots to CMA CGM on the Atlantic and exchanging space with Evergreen in the Asia-Europe trades. Although the early weeks of 2008 saw a slowdown in growth on the Asia to Europe corridor, volumes are still expanding enough to justify the arrival of more capacity.The Grand Alliance last week announced a new service, a fifth string connecting Asia with northern Europe that starts this week.
The new EU5 service will be run with eight 5,500 teu units and will include calls at Amsterdam, the facility owned by Grand Alliance member NYK. Other ports in the rotation will be Hamburg, Southampton, Singapore, Shanghai, Ningbo, Xiamen and Singapore.