Maersk Line said it is cutting vessel capacity on the Asia-Europe route by 9 percent in a bid to boost flagging freight rates and restore profitability but vowed to defend its market share on the world’s biggest container trade lane.
The Danish carrier is also mulling further ways to cut capacity on the depressed lane by laying-up ships, slow steaming and redelivering time chartered vessels “where commercially appropriate." Maersk also confirmed it will not exercise an option to buy an additional 10 18,000 20-foot equivalent units vessels on top of the 20 ships it ordered in 2011.
The 9 percent cut, to be achieved through a vessel-sharing agreement with rival carrier CMA CGM on the Asia-Mediterranean route in early April, comes on the eve of planned rate hikes by most lines ranging $750 to $800 per 20-foot container on the westbound leg from Asia on March 1.
“With this adjustment we are able to reduce our Asia-Europe capacity and improve vessel utilization without giving up any market share we have gained over the past two years,” said Soren Skou, CEO of the world’s largest ocean carrier.
“We will defend our market share position at any cost, while focusing on growing with the market and restoring profitability.”
Maersk referred to a report by Alphaliner, a container analyst that traffic growth on the Asia-Europe trade will slow to 1.5 percent in 2012 from an estimated 2.8 percent in 2011, due to a weakening economic outlook in Europe. The world’s container fleet, by contrast, is set to grow by 8.3 percent in 2012.
“The Asia-Europe trade remains the world’s busiest trade lane, however the supply of vessels currently operating on this trade simply outweighs the demand,” said Vincent Clerc, chief product and yield officer for Maersk Line.
Maersk said the vessel-sharing agreement with France’s CMA CGM will allow it to remove capacity “while still maintaining full and competitive coverage for its customers.”
The agreement will also cut the cost of serving the western Mediterranean and allow Maersk to deploy ships where they are most needed and to pursue further slow-steaming, the Copenhagen-based carrier said.
The agreement calls for Maersk and CMA CGM to merge their AE11 and MEX services into a new AE11/MEX operation deploying a weekly capacity of 12,500 TEUs to cover the trade to and from Asia and Spain, France and Italy.
To cover their Mediterranean hubs the two carriers will merge their planned AE20 and FAL9 services into a new AE20/MEX3 service with a weekly capacity of 9,500 TEUs. Maersk will also reinstate two port calls in Algeciras, Spain, on its North Europe Daily Maersk strings.
CMA CGM didn’t say how much capacity it is taking by merging its services with Maersk.”This reorganization is part of CMA CGM’s commitment to keep providing its customers with the best quality of service on the Asia-West Med service,” the Marseille-based carrier said.
Maersk cut capacity on the Asia-Europe route in November by merging its ICON service, which links the Far East and Indian subcontinent to northern Europe, into its Daily Maersk network. The carrier led an industry-wide cull of capacity during the 2009 container shipping bear market by idling and laying up around 25 medium-sized vessels.
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