Alliances shift Asia strings from US to Europe routes

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

30 Oct 2007

With the US economy in the doldrums because of the housing slump and retail demand for Asian cargo slumping, lines are suspending some transpacific services and adding more strings to the Asia-Europe route.The Grand Alliance lines - NYK, OOCL, Hapag-Lloyd and MISC - have suspended their North China California Express (NCX), effectively pulling out four vessels providing up to 4,000 TEUs of weekly capacity.The alliance is planning to launch a new Asia-North Europe service in January which will be stepped up to a weekly frequency in February and March.The CKYH Alliance – Coscon, ''K'' Line, Yang Ming and Hanjin – will cut back the number of sailings on their joint China America Express (CAX) service next month as well as in December, ahead of the launch of two new Asia-Europe services by its members in November and January.Concerns over the slump in the US housing market resulting in a drop in import demand, coupled with the relative weakness of the US dollar, is believed to have been the driving factor behind the decision of the alliances to cut capacity on the transpacific route.The Grand Alliance is forming a newly-merged transpacific loop following the suspension of the NCX service with some of the port calls moving to the old Central China Express (CCX) service. The new loop will deploy five vessels ranging from a capacity of 4,000 to 6,000 boxes.Yang Ming of the CKYH Alliance will launch a new Asia-Europe service to be called the Asia-Europe Express Loop 3 (AEE). ''K'' Line will be involved in the route as a vessel provider. The AEE will initially kick off a fortnightly service with four 4,000 TEU Yang Ming vessels before providing a weekly service in the first quarter of next year with the addition of four similar-sized vessels from ''K'' Line.Another alliance member, Hanjin, has confirmed it will start a new Asia-Europe service in November, but not with an alliance partner. The first sailing dates have already been set with the 4,024 TEU Hanjin Los Angeles expected to leave Shanghai on November 27 followed a week later by the 4,024 TEU Hanjin Malta.The transpacific import slack has also helped to provide capacity for new Asia-Black Sea-East Mediterranean services, with the Grand Alliance, Wan Hai-PIL, China Shipping, Yang Ming, Hanjin, ''K'' Line, Zim and Evergreen all launching new services, pushing up capacity on the trade by more than 50 percent in the last quarter of this year.The world's three largest shipping companies, Maersk, Mediterranean Shipping Co (MSC) and CMA CGM launched new Asia-Mediterranean services within a month recently to specifically service one market – North Africa, which is expected to grow by more than 25 percent this year. The lines are using key Mediterranean ports because few, if any, ports in North Africa can efficiently handle large panamax containerships.The first all water service between Asia and the US East Coast, called the AWE5, has also been dropped by Hanjin and ''K'' Line, removing another 4,000 TEUs per week. This comes despite strong growth on the East Coast trade.