Maersk responds to oversupply of vessels by reducing Asia-Europe capacity
Capacity reduction to be facilitated by vessel sharing agreement with CMA CGM
Maersk Line, the world’s largest shipping line, has announced that it will reduce its capacity on the Asia-Europe trade lanes by 9 percent in an effort to restore profitability.
Oversupply of container vessels operating on the Asia–Europe trade lane has pushed Maersk Line’s container freight rates to unsustainably low levels.
“With this adjustment we are able to reduce our Asia–Europe capacity and improve vessel utilisation without giving up any market share we have gained over the past two years,” says Maersk Line CEO, Søren Skou.
“We will defend our market share position at any cost, while focusing on growing with the market and restoring profitability.”
The 9 percent capacity reduction will be facilitated by a vessel sharing agreement with the French shipper, CMA-CGM.
With the agreement, Maersk Line and CMA CGM will merge their respective AE11 and MEX services into one new AE11/MEX (operating 12500 TEU per week) to cover the trade from the Far East to and from Spain, France, Italy.
To cover the Mediterranean hubs, Maersk Line and CMA CGM will merge their announced AE20 and FAL9 services into a new AE20/MEX3 service, operating a weekly capacity of 9,500 TEU.
Maersk Line will also further complement the coverage of its volume requirements in the Mediterranean hubs with the reinstatement of two port calls in Algeciras, Spain on its North Europe Daily Maersk strings.
A January report from shipping analyst, Alphaliner, predicted Europe-Far East container traffic growth would slow to 1.5 percent in 2012 from an estimated 2.8 percent in 2011, due to a weakening economic outlook in Europe. The industry container vessel fleet, by contrast, is set to grow by 8.3% 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.
“We are therefore rationalising our service by taking out vessel capacity and thereby reducing costs.”
Where commercially appropriate, Maersk Line will also consider additional opportunities to reduce capacity, including redelivery of time charter tonnage, the use of lay-ups and slow-steaming.
Additionally and in line with previous guidance, Maersk Line will not declare the option for the last ten Triple-E vessels.
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