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on heels following the move by the
New World Alliance to withdraw
capacity by restructuring its
Pacific service three weeks ago, the
Grand Alliance has laid off five
post panamax container ships in the
Europe-Asia service to stop the
deteriorating freight market. The
move is also being followed by the
largest independent operator –
Maersk Sealand.
In
addition to the restructuring if its
Pacific service, the New World
Alliance is said to be considering
dropping the fortnightly loop of its
China to Europe service that was
launched in June.
The
New World alliance, comprising APL,
Hyundai Merchant Marine and MOL,
started its fourth Asia/Europe
string, the New China Europe
Express, Justin June months ago in
the midst of downturn in the trade.
The
service was cut to fortnightly last
month as part of capacity reductions
agreed by members of the Far Eastern
Freight Conference.
Liner
industry sources say that New World
Alliance members are now planning to
drop the remaining fortnightly loop
of the China to Europe service as
market conditions on the trade
continue to worsen and alliances are
forced to take steps to avoid over-
capacity.
Some
rates between China and North Europe
have fallen as low as US$350 per TEU,
a big worry for carriers as the
westbound trade is traditionally
stronger.
Meanwhile,
the Grand Alliance is planning to
withdraw its Far East Express
service, known as FEX, from early
December until April at the
earliest.
The
alliance has indicated it could lay
off as many as 13 vessels.
Temporarily
stopping the FEX — which calls at
Xiamen, Yantian, Hong Kong, Los
Angeles and Oakland eastbound,
returning via Tokyo, Nagoya and Kobe
— will reduce the alliance’s
transpacific capacity by about 15
per cent, the group estimates.
The
Grand Alliance, consisting of
P&O Nedlloyd, Hapag-Lloyd,
Orient Overseas Container Line, NYK
Line and Malaysia International
Shipping Corp, is the latest service
provider to axe capacity across the
Pacific.
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