Grand Alliance, New World Alliance reducing capacity on transpacific trades

The world’s two largest container shipping alliances are preparing to reduce capacity on the transpacific trades in response to plummeting freight rates, reports the South China Morning Post.

Additionally, the world’s largest shipping line, Maersk Sealand, will withdraw tonnage from the Asia-United States trades next week by reducing its pendulum service linking the US east and west coasts, Asia and Mediterranean to a simple Asia-Med-US service. It is expected that it will cut capacity by almost a third on one service.

With rates at record lows and over-capacity high on the world’s busiest trade lane, the Grand Alliance lines – P&O Nedlloyd, OOCL, Hapag-Lloyd and Japan’s NYK – will end their joint South China Express service early next month and mothball tonnage until the spring.

In an unprecedented move, Grand Alliance members, which offer the most slot capacity, intend to cover all South China Express ports by scheduling additional stops on other services.

Transit times – the selling point behind the express service – will be affected.
Grand Alliance lines will move express-service cargo across the Pacific by adding calls at Laem Chabang and Kaohsiung to the Far Eastern Express service, and introducing calls at Xiamen on the joint Japan China Express service.

The member lines from the New World Alliance (APL, Hyundai and Japan’s MOL) will end their Pacific Northwest Express service from this month, offering additional port coverage through a service linking Asia with the US west and east coasts.

The Pacific Northwest service is being merged with New World’s east-coast service, effectively linking Asia with the US east coast via Panama.

The newly restructured service will call at Chiwan, Hong Kong, Kaohsiung, Kobe, Nagoya, Tokyo, Manzanillo, Miami, Charleston, Norfolk, New York, Norfolk, Charleston, Manzanillo, Oakland, Tokyo, Kobe and Chiwan. The north Europe ports remain unchanged.
Additionally, New World’s PS1 service will drop Port Kelang and the PS3 service will drop Oakland which will join another service.

The New World initiative withdraws five ships, each of about 3,000 teu (20 foot equivalent units) from the Pacific, representing almost 10 per cent of the group’s transpacific tonnage.

Next week Maersk Sealand ends its transpacific sector of the Suez Express service by reducing the US west coast-Asia-Mediterranean-US east coast service to 10 ships from 14.

It also will drop its TP5 service, which forms the transpacific part of the Suez Express, and switch three of the four ships to the Asia-Europe trade.