Maersk Line has decided to pull out from a service it runs in partnership with Hamburg Sud linking North American with South American East Coast ports.
Known as the NASA service, the route has been deemed by Maersk Line to have “unprofitable cargo volumes.”
Maersk Line said the end to its 'slot charter agreement' with Hamburg Sud would be effective from August 17 this year.
“As of 18 August 2008, Maersk Line will no longer accept cargo in this trade,” said the A.P. Moller-Maersk A/S unit.
Maersk Line had been running NASA by itself until last year when Hamburg Sud entered the picture with a slot charter agreement being reached between the two major carriers.
Although the slot charter agreement reportedly “helped them stem a slide in freight rates”, the reduced capacity apparently did not translate into profits.
Low volumes of south-bound cargo shipments have been widely blamed, and industry players say that despite rising US exports on the back of a weakening US dollar, north-bound cargo volumes will still far outstrip south-bound shipments.
Hamburg Sud North America's senior vice president Frank Larkin has been quoted saying that “Hamburg Sud will pick up the slack left by Maersk, but it won't be easy to fill container slots.”
Larkin highlighted the fact that other carriers such as the CMA CGM Group, Maruba and MOL have also already pulled tout of these routes as “they couldn't make a profit shipping from North America to the east coast of South America.”
Known as the NASA service, the route has been deemed by Maersk Line to have “unprofitable cargo volumes.”
Maersk Line said the end to its 'slot charter agreement' with Hamburg Sud would be effective from August 17 this year.
“As of 18 August 2008, Maersk Line will no longer accept cargo in this trade,” said the A.P. Moller-Maersk A/S unit.
Maersk Line had been running NASA by itself until last year when Hamburg Sud entered the picture with a slot charter agreement being reached between the two major carriers.
Although the slot charter agreement reportedly “helped them stem a slide in freight rates”, the reduced capacity apparently did not translate into profits.
Low volumes of south-bound cargo shipments have been widely blamed, and industry players say that despite rising US exports on the back of a weakening US dollar, north-bound cargo volumes will still far outstrip south-bound shipments.
Hamburg Sud North America's senior vice president Frank Larkin has been quoted saying that “Hamburg Sud will pick up the slack left by Maersk, but it won't be easy to fill container slots.”
Larkin highlighted the fact that other carriers such as the CMA CGM Group, Maruba and MOL have also already pulled tout of these routes as “they couldn't make a profit shipping from North America to the east coast of South America.”