The CKYH alliance will not resume the NE4 Asia-North Europe service it suspended in October 2012, blaming soft forward demand and falling freight rates.
CKYH will also cull its NE1 loop, leaving its Asia-Europe customers with four services – NE2, NE3, NE6 and NE7 – to north Europe and three – MD1,MD2 and MD3 –to the Mediterranean.
In recent weeks, westbound spot rates have continued to decline on the overcapacity-plagued Asia-Europe tradelane and have now fallen around 20% since the end of January.
This raises doubts over the carriers’ ability to implement the $700 per teu general rate increase they had planned for this week.
CKYH comprises Coscon, K Line, Yang Ming and Hanjin Shipping. Previous reports suggested it would reactivate its NE4 service in May, exerting more downward pressure on rates.
However, the parlous financial performance of some of its members has clearly made the alliance rethink its strategy on the NE4 and other services.
CKYH’s announcement will be welcomed by the alliance’s peers, all attempting to halt a freight-rate freefall.
In February, Maersk Line culled its AE-9 loop weeks after reactivating it, after the G6 alliance opted not to resume its own Loop 3, saying “we anticipate the current supply and demand balance will continue”
CKYH will also cull its NE1 loop, leaving its Asia-Europe customers with four services – NE2, NE3, NE6 and NE7 – to north Europe and three – MD1,MD2 and MD3 –to the Mediterranean.
In recent weeks, westbound spot rates have continued to decline on the overcapacity-plagued Asia-Europe tradelane and have now fallen around 20% since the end of January.
This raises doubts over the carriers’ ability to implement the $700 per teu general rate increase they had planned for this week.
CKYH comprises Coscon, K Line, Yang Ming and Hanjin Shipping. Previous reports suggested it would reactivate its NE4 service in May, exerting more downward pressure on rates.
However, the parlous financial performance of some of its members has clearly made the alliance rethink its strategy on the NE4 and other services.
CKYH’s announcement will be welcomed by the alliance’s peers, all attempting to halt a freight-rate freefall.
In February, Maersk Line culled its AE-9 loop weeks after reactivating it, after the G6 alliance opted not to resume its own Loop 3, saying “we anticipate the current supply and demand balance will continue”
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