Carriers suspend some Asia-Europe сalls in mid-peak season

    The recovery of the Asia – Europe trade remains tentative, with weak cargo demand forcing some carriers to pull out sailings in what should have been the peak shipping season for the trade.

     Maersk and the CHKY alliance members have taken the lead to skip some calls for a month of July to better manage capacity. The decision illustrates to difficulties to fill the Asia-Europe ships as the faltering demand on the Europe side does not allow to mop up the extra capacity recently added to the trade. The capacity supply has increased by 9% over the past three months, while demand went down by abt.5% in same period of time.

    Cosco Container Lines, “K” Line, Yang Ming and Hanjin Shipping announced they would independently implement what they call a “capacity rationalization plan” on their services in the two trade lanes by skipping some voyages in July and August.

    Even as the four carriers announced their skipped calls, average spot rates in the Asia-Europe trade lane eased slightly this week as vessel overcapacity continues to erode the big general rate increases carriers have put into effect this year.

    In the period from the end of July to the middle of August, the CKYH carriers will set what they call “blank sailings” on the NE1 service operated by Cosco, the NE4 service jointly operated by Yang Ming and “K” Line, and the MD1 service jointly operated by Cosco and Hanjin Shipping.

    The specific voyages that are being skipped are:

    
• 
          The NE4 call at Ningbo will be skipped on July 25.

    
• 
          The NE1 service call at Shanghai will be skipped on Aug. 4.

    
• 
          The MD1 service call by the Hanjin Rotterdam, which has a capacity of 8,600 20-foot equivalent units, at Qingdao on Aug. 4 will be replaced by a smaller vessel with a capacity of 5,600 TEUs.

    
• 
          The NE4 service’s Yang Ming Mobility will skip its call at Ningbo on Aug. 15.

    The CKYH carriers’ move follows the decision of Maersk to skip four sailings in early July, which was done without any public announcements:

    
• 
          AE5 sailing skipped on Week 28 eta Ningbo 8 July

    
• 
          AE6 sailing skipped on Week 27 eta Ningbo 4 July

    
• 
          AE9 sailing skipped on Week 27 eta Qingdao 5 July (with downgraded connections at Tanjung Pelepas, capacity reduced by 4’000 TEU).

    
• 
          AE20 sailing skipped on Week 28 eta Shanghai 13 July (service jointly run with CMA CGM)

    Despite Maersk’s skipped sailings in the first two weeks of July, the Far East – Europe spot rates come under increasing pressure. Vessel load factors remain well below normal peak season levels, averaging just 90%, which has pulled down spot rates on the FE-North Europe trade by 7% in the last two weeks, based on SCFI.

    Forward rates suggest that FE-Europe rates have peaked in early July and are expected to trend down in the next six months.