Maersk Line cuts one of its Asia-Europe services
Soaring fuel prices have forced Maersk Line to suspend one of its Asia-Europe services just before the start of the peak season.
The removal of the AE5 loop is a temporary measure in response to escalating bills and the need to contain costs, said Lee Sissons, director of Maersk Line’s Asia-Europe westbound trades.
But whether it is restored at a later date will depend on market conditions and the strength of the forthcoming peak season, when Christmas merchandise is shipped to Europe.
The withdrawal of the service next month will remove about 4,000 teu a week from the trade.
The shipping line operates 10 Asia-Europe services and the move will cut its capacity by between 7%-8%.
The announcement from Maersk Line came on the eve of another attempt by major lines in the Asia-Europe trades to raise freight rates.
Far Eastern Freight Conference members, including Maersk Line, will be pressing for a $300 per teu increase from today for cargo moving from the main Asian ports to Europe, and $400 per teu for freight being shipped from other points.
This will be the last rate restoration effort by the FEFC before conferences are closed down in Europe, and comes at a time when cargo volumes are growing at half the pace of a year ago.
Latest FEFC figures show westbound volumes were up 10.3% to just over 4m teu in the first five months of 2008.
This figure compares with a total increase in Asia-Europe liftings last year of almost 20%.
Capacity, meanwhile, is increasing at a faster rate, with a stream of ships in excess of 10,000 teu capacity to be delivered over the next few years, all of which are earmarked for the Asia-Europe trades.
Latest AXSLiner statistics put the total containership orderbook at 1,418 ships of 7m teu, equivalent to 60% of the existing fleet. That figure includes 339 units with nominal capacity of at least 7,500 teu. Around 160 of the ships to be built will be 12,000 teu or larger.
The ships that Maersk Line is withdrawing from the trade when its AE5 loop goes will not be redeployed in any other Asia-Europe service, said Mr Sissons.
The line is stressing that all port pairings will be preserved, since the AE5 string did not have any unique combinations. The service links Xiamen, Shanghai, Kaohsiung, Shekou and Tanjung Pelepas with Port Said, Piraeus, Ambaril and Thessaloniki. In future, the AE8 loop will cover Kaohsiung. The last AE5 call at the Taiwan port will be on Saturday. Ships in the loop include the 4,200 teu Maersk Malacca and 5,000 teu Maersk Dieppe.
In another service adjustment, Maersk Line’s AE7 service will consist of nine ships from this coming weekend when Ella Maersk joins the loop. Service speeds on eastbound sailings will then be adjusted from around 22.5 knots to 20 knots in a fuel conservation effort. But calls at Tangiers and Tanjung Pelepas are being added to the return leg.
All of Maersk Line’s Asia-Europe strings now have an additional ship as speeds are cut back, with those from northern Asia being operated with nine rather than the traditional eight ships, and those from southeast Asia going up from seven to eight vessels.
Maersk Line is also making minor port rotation adjustments to its AE2 loop, but said that customers should not be adversely affected by any of the changes, since the overall network and ports of call will remain intact.
The removal of the AE5 loop is a temporary measure in response to escalating bills and the need to contain costs, said Lee Sissons, director of Maersk Line’s Asia-Europe westbound trades.
But whether it is restored at a later date will depend on market conditions and the strength of the forthcoming peak season, when Christmas merchandise is shipped to Europe.
The withdrawal of the service next month will remove about 4,000 teu a week from the trade.
The shipping line operates 10 Asia-Europe services and the move will cut its capacity by between 7%-8%.
The announcement from Maersk Line came on the eve of another attempt by major lines in the Asia-Europe trades to raise freight rates.
Far Eastern Freight Conference members, including Maersk Line, will be pressing for a $300 per teu increase from today for cargo moving from the main Asian ports to Europe, and $400 per teu for freight being shipped from other points.
This will be the last rate restoration effort by the FEFC before conferences are closed down in Europe, and comes at a time when cargo volumes are growing at half the pace of a year ago.
Latest FEFC figures show westbound volumes were up 10.3% to just over 4m teu in the first five months of 2008.
This figure compares with a total increase in Asia-Europe liftings last year of almost 20%.
Capacity, meanwhile, is increasing at a faster rate, with a stream of ships in excess of 10,000 teu capacity to be delivered over the next few years, all of which are earmarked for the Asia-Europe trades.
Latest AXSLiner statistics put the total containership orderbook at 1,418 ships of 7m teu, equivalent to 60% of the existing fleet. That figure includes 339 units with nominal capacity of at least 7,500 teu. Around 160 of the ships to be built will be 12,000 teu or larger.
The ships that Maersk Line is withdrawing from the trade when its AE5 loop goes will not be redeployed in any other Asia-Europe service, said Mr Sissons.
The line is stressing that all port pairings will be preserved, since the AE5 string did not have any unique combinations. The service links Xiamen, Shanghai, Kaohsiung, Shekou and Tanjung Pelepas with Port Said, Piraeus, Ambaril and Thessaloniki. In future, the AE8 loop will cover Kaohsiung. The last AE5 call at the Taiwan port will be on Saturday. Ships in the loop include the 4,200 teu Maersk Malacca and 5,000 teu Maersk Dieppe.
In another service adjustment, Maersk Line’s AE7 service will consist of nine ships from this coming weekend when Ella Maersk joins the loop. Service speeds on eastbound sailings will then be adjusted from around 22.5 knots to 20 knots in a fuel conservation effort. But calls at Tangiers and Tanjung Pelepas are being added to the return leg.
All of Maersk Line’s Asia-Europe strings now have an additional ship as speeds are cut back, with those from northern Asia being operated with nine rather than the traditional eight ships, and those from southeast Asia going up from seven to eight vessels.
Maersk Line is also making minor port rotation adjustments to its AE2 loop, but said that customers should not be adversely affected by any of the changes, since the overall network and ports of call will remain intact.