[121113.EN.SEA] P3 Plans For Moderate Capacity Growth Arouse Fears Among Rival Carriers

THE proposed P3 vessel-sharing alliance plan only moderate vessel capacity growth on its services between Asia-Europe and Asia-North America, which will come as good news to rivals plying the same routes.

The alliance members, Maersk, MSC and CMA CGM, according to Drewry Maritime Research, have opted for only moderate vessel capacity growth in their new schedules that take effect during the second quarter 2014, implying that the members will focus more on delivering quality rather than quantity and this will be their main fighting tool.

In the case of Asia-North Europe, a 2.25 per cent increase is planned compared to the capacity offered at the beginning of September. There will also be one less weekly service, although this will be more than compensated by a 14 per cent increase in average vessel capacity, up to 13,032 TEU, including the deployment of more 18,000 TEU vessels from Maersk.

Between Asia and the Mediterranean there will also be one less weekly service. However, Drewry says, it is not yet possible to assess the impact of this on capacity as vessel deployment within the new services remains to be clarified. It has been confirmed so far that the P3's new services will deploy vessels between 8,500 TEU and 16,000 TEU.

The position within the transpacific is more complicated to assess as several end-to-end services are being replaced by innovative new pendulum schedules that sometimes switch between the North American east and west coasts to gain economies of scale.

Existing transpacific schedules are planned to be changed in more detail. Asia-west coast North America capacity will be increased five per cent, up to 2,756,000 TEU, and Asia-east coast North America capacity will be raised eight per cent, up to 1,586,000 TEU, compared to that available at the beginning of September.

The effects of the changes being made to transatlantic services are not yet clear owing to the complexity of separating existing services shared with other shipping lines.

If all goes to plan the P3 alliance will offer a total of 252 vessels with a combined capacity of 2.6 million TEU deployed in 28 separate weekly Asia-Europe, Transpacific and Transatlantic loops, of which Maersk will provide 42 per cent.

Drewry is still of the view that the advantages of the P3 alliance should outweigh its disadvantages, including better pricing stability, schedule reliability, frequency, and direct port pair connections. However, it warns there is the danger that with less to differentiate service quality between the three carriers, price will become the determining factor.

Source : HKSG, 08.11.13.