Two of the world's largest container shipping lines, CMA CGM and Maersk, are to set up a new vessel sharing agreement on the struggling Asia-Europe trade.
It is a stunning development on a trade route that has been decimated by a slowdown in consumer demand in Europe and the corresponding slowdown of China exports.
Maersk will join CMA CGM as a vessel provider on the French line's prestigious French Asia Line (FAL) service this month.
The FAL service network, which includes no less than four separate services with an aggregate weekly capacity of almost 40,000 TEUs, has historically been a CMA CGM service with vessel sharing and slot deals mostly with China Shipping Container Lines and Evergreen.
Maersk will deploy its 9,600 TEU Maersk Algol on the FAL service from Dalian in mid-November, boosting vessel deployment on the service to 10 vessels, all above 9,000 TEUs.
This is a major step towards a capacity consolidation on the trade that will help cut operational costs as rates hover at rock bottom. Shippers are paying less than US$1,200 per TEU, a figure that includes bunker adjustment and currency adjustments charges of around $1,000 a box. During the peak season in September and October last year, shipping lines were securing top freight rates of above $2,200 per container.
CMA CGM had previously confirmed a tonnage cascade programme to upgrade the FAL service through 2008 and 2009 from 8,000 TEU ships to 11,000 TEU newbuildings, but with Maersk now a vessel provider on the service, this is now unlikely.
The FAL port rotation is Dalian, Tianjin, Hong Kong, Yantian, Singapore, Port Kelang, Tangier, Southampton, Hamburg, Rotterdam, Zeebrugge, Le Havre, Malta, Khorfakkan, Pusan, Kwangyang, Dalian.
From the Maersk viewpoint, the new vessel sharing agreement means increased coverage of the China market through additional calls at Dalian, Tianjin, Shanghai, Yantian and Hong Kong.
But from the French line's perspective, the new set-up is enough to raise eyebrows. CMA CGM has an extensive newbuilding order book that includes 35 containerships of over 11,000 TEU capacity that will be delivered by 2011.No less than 13 of those vessels were scheduled for delivery next year, and most would have been destined for the Asia-Europe trade.
It is a stunning development on a trade route that has been decimated by a slowdown in consumer demand in Europe and the corresponding slowdown of China exports.
Maersk will join CMA CGM as a vessel provider on the French line's prestigious French Asia Line (FAL) service this month.
The FAL service network, which includes no less than four separate services with an aggregate weekly capacity of almost 40,000 TEUs, has historically been a CMA CGM service with vessel sharing and slot deals mostly with China Shipping Container Lines and Evergreen.
Maersk will deploy its 9,600 TEU Maersk Algol on the FAL service from Dalian in mid-November, boosting vessel deployment on the service to 10 vessels, all above 9,000 TEUs.
This is a major step towards a capacity consolidation on the trade that will help cut operational costs as rates hover at rock bottom. Shippers are paying less than US$1,200 per TEU, a figure that includes bunker adjustment and currency adjustments charges of around $1,000 a box. During the peak season in September and October last year, shipping lines were securing top freight rates of above $2,200 per container.
CMA CGM had previously confirmed a tonnage cascade programme to upgrade the FAL service through 2008 and 2009 from 8,000 TEU ships to 11,000 TEU newbuildings, but with Maersk now a vessel provider on the service, this is now unlikely.
The FAL port rotation is Dalian, Tianjin, Hong Kong, Yantian, Singapore, Port Kelang, Tangier, Southampton, Hamburg, Rotterdam, Zeebrugge, Le Havre, Malta, Khorfakkan, Pusan, Kwangyang, Dalian.
From the Maersk viewpoint, the new vessel sharing agreement means increased coverage of the China market through additional calls at Dalian, Tianjin, Shanghai, Yantian and Hong Kong.
But from the French line's perspective, the new set-up is enough to raise eyebrows. CMA CGM has an extensive newbuilding order book that includes 35 containerships of over 11,000 TEU capacity that will be delivered by 2011.No less than 13 of those vessels were scheduled for delivery next year, and most would have been destined for the Asia-Europe trade.
