In a move further stirring the already chaotic and unsettled trade lane between the West Coast of the United States and Europe, Atlantic Container Line is preparing to withdraw its ships from service there.
Sales representatives of the carrier started informing shippers on the West Coast of the withdrawal of its ships on Tuesday. Officials at the company refused to comment, saying their plans would be revealed in a meeting with The Journal of Commerce today."We are examining options, and a statement will be made at a later date," said Steve Rowlett, ACL's general manager for the West Coast and Mexico at the carrier's South Plainfield, N.J., office.
ACL's exit comes on the heels of Compagnie Generale Maritime's departure
from U.S. service, which was completed with the final pullout of its ships
from the West Coast/Europe trade lane late last week.
Other ship lines have been revamping their services on the trade as well.
Evergreen Marine Corp., which serves the West Coast through its round-the- world service, has reduced the amount of space it offers on its ships for the West Coast-to-Europe segment of its journey. Hapag-Lloyd AG also plans to change its West Coast service in April through a new pendulum service with Nippon Yusen Kaisha and Neptune Orient Line.
ACL's exit was not totally unexpected by carrier and shipper executives familiar with the trade lane. The London-based carrier, owned by Bilspedition Ltd., was in a joint weekly service with Hapag-Lloyd and CGM. ACL and CGM provided two ships apiece while Hapag-Lloyd provided four.
Once CGM and Hapag-Lloyd announced their plans, ACL's participation in the trade was thrown into question.
ACL's withdrawal is likely to take place in late January, according to information provided to shippers by the carrier. Sailings from the East and Gulf coasts are likely to remain intact.
ACL's exit is likely to exacerbate tensions between shippers and carriers over rates between the West Coast and Europe - a major route for U.S. agricultural exports like dried fruit and nuts.
"It's indicative of the real problems here," said Alan Hicks, general manager of the West Coast for P&O Containers Ltd., which slots charters space on Maersk Line ships. "We've done as much as we can on the cost side. Now the revenue side has to be treated."
"It will be a temporary vacuum," countered Jil Morley, transportation administrator for Blue Diamond Growers, a Sacramento, Calif.-based almond growers cooperative. "There is so much capacity worldwide, if supply is needed it will come."
This year major carriers on the trade, united by the Trans-Atlantic Agreement, refused to grant discount contract rates on the trade. However, large growers like Blue Diamond managed to move the bulk of their fall harvest on CGM and smaller players like Star Shipping Inc. and Wilhelmsen Line at reduced rates.