Grand China Shipping has become the latest niche carrier to suspend a trans-Pacific service because of deteriorating conditions in the U.S. import trade from China.
Grand China Shipping (USA) said the final sailing from China to the U.S. West Coast will depart Yantian on Nov. 5. The vessel will also call on Ningbo and Shanghai before departing for Long Beach. The last westbound sailing will leave Long Beach on Nov. 25.
A half-dozen niche carriers entered the trans-Pacific more than a year ago when cargo volumes were increasing steadily and freight rates were above $2,000 per-40-foot container.
Niche carriers operate small vessels of about 3,000-TEU capacity, or less than half the capacity of most vessels in the trade. The routes were between China and Los Angeles-Long Beach.
However, trade conditions have deteriorated steadily since last winter, with container volumes edging up in low single-digits rather than the 6 to 9 percent growth projected earlier this year. At the same time, carriers took possession of large new vessels, increasing their global capacity by about 15 percent.
As a result, the spot freight from Hong Kong to Los Angeles has dropped below $1,500 per-FEU, with further deterioration anticipated as the eastbound Pacific enters the traditional slack season.
Earlier this year, The Containership Company filed for bankruptcy. Since then, Matson Navigation, CSAV and Horizon Lines announced they were discontinuing trans-Pacific services. Grand China said it is temporarily suspending its trans-Pacific service while it concentrates on its core intra-Asia and domestic services.