Carrier Alliance to Suspend Some Trans-Pacific Service

Carrier Alliance to Suspend Some Trans-Pacific Service

Ocean carriers in the New World Alliance will suspend a trans-Pacific service this month due to slowing demand for retail merchandise and reductions in inventory replenishment in the U.S.

Alliance members Hyundai Merchant Marine, APL and MOL will remove one weekly string of vessels, each averaging 3,960 TEUs, in the Pacific Southwest service. The lines term the move an effort to right-size capacity given reduced expectations for imports from Asia.

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A reduction in vessel capacity in July is unusual because the late summer to fall period is the busiest time of the year in trans-Pacific trade lanes.

But rates in the market have been soft heading toward the peak season and some carriers have started to pull capacity out of trans-Pacific and Asia-Europe lanes as a result. 

“Softening consumer demand is giving importers cause to retrench in regards to inventory levels previously planned for the upcoming holiday shopping season,” said Lamont Peterson, vice president-marketing at Hyundai Merchant Marine.

To maintain sufficient capacity for U.S. importers, alliance members will adjust remaining services from Asia to the West Coast. “Hyundai and TNWA will accommodate their customers’ requirements for space, even during periods of increased demand, on remaining strings that duplicate the PSW ports of call,” Hyundai said in a release.

-- Contact Bill Mongelluzzo at bmongelluzzo@joc.com. Follow him on Twitter @billmongelluzzo.