Even as it announced plans to order five big new containerships, Hanjin Shipping said it will suspend its Asia-Europe NE5 service in early July.
The carrier operates the service in conjunction with its partners in the Green Alliance, formerly the CKYH alliance, between Cosco, “K” Line, and Yang Ming.
Freight rates on the Asia-Europe trade lane have been plunging since early in the year because of overcapacity caused by the scheduled delivery this year of so many big new ships that are designed for that trade.
Hanjin posted a loss of $28 million on container operations in the first quarter, compared with $23 million a year earlier, as rising fuel costs offset a 19 percent increase in container revenue. The carrier said declining Asia-Europe rates and increased fuel and logistics costs hurt their revenue.
Hanjin announced Friday that it will spend $845.9 million on building five new containerships with capacities of 13,000 20-foot equivalent units, which are best suited for the Asia-Europe trade.
The South Korean carrier said in a regulatory filing that the new ships would improve its cost structure through the expansion of its line-up
Hanjin announced the suspension of the NE5 on its website Friday. It said the NE5 service will be suspended with the departure of the Hanjin Ottawa from Shanghai on July 3.
The NE5 service has the following port rotation: Shanghai, Ningbo, Kaohsiung, Yantian, Ho Chi Minh City, Singapore, Algeciras, Hamburg, Rotterdam, Le Havre, Algeciras, Singapore and back to Shanghai.
The suspension of the NE5 service follows the launch by the Green alliance in April of the new NE6 Asia-Europe service, with the following port rotation: Kwangyang, Pusan, Ningbo, Shanghai, Xiamen, Hong Kong, Yantian, Felixstowe, Hamburg, Rotterdam, Singapore and back to Kwangyang.