[231010.EN.SEA] Maersk To Cut Europe Capacity 10pc

COPENHAGEN's Maersk Line has announced it will suspend its Asia-Europe AE-9 service, deploying nine ships each between 6,000 to 8,000 TEU, from mid-November, cutting its capacity on the trade lane 10 per cent in response to shrinking demand.

"A few weeks ago, we said that we were ready to adjust our capacity to post-peak demand levels," said Maersk's Asia-North Europe chief Lee Sissons. "We are taking out one service [and] we will make adjustments to our network to maintain schedule reliability and coverage."

Maersk Line has joined the Grand Alliance in announcing that it will withdraw vessel capacity from the Asia-Europe trade lane during the winter season, reported London's Containerisation International. The slow period is usually used for vessel maintenance. Thus, no lay-ups are expected. 

Maersk will also reduce capacity from Asia to the US in December when its TP1 service stops after an Horizon Lines announced it would assume service itself, reported American Shipper. Maersk said it will not replace eastbound capacity and will allow other Maersk services to make up for it.

"Market demand is the driver," said a Maersk spokesman. "Should the market drop we would review. Additional capacity could be withdrawn, but there is no indication of this at this time." 

Other carriers are understood to have cut capacity too. Maersk also expects more capacity to be withdrawn after the February 3 Chinese New Year. 

According to Container Trade Statistics (CTS), July and August's average monthly flow of 807,000 TEU to northern Europe was only 9.4 per cent more than the second quarter's monthly average of 738,000 TEU. Growth rose 6.9 per cent to 1.22 million TEU per month if the Mediterranean is included. 

According to the Shanghai Containainerised Freight Index, the average spot rate from Shanghai to north Europe on October 15 was US$1,563 per TEU all-in, which was down from $1,870 per TEU on June 30, and US$1,552 per TEU to main Med ports against to US$1,906 per TEU charged at the end of June.

London's Drewry Shipping Consultants said average all-in spot rates from south China to the Britain peaked in July at $4,170 per FEU, then dropped to $3,950 per FEU in August and shrank again to $3,800 per FEU in September.

Source : HKSG, 22.10.10.