Subscribe to our free, weekly email newsletter!


Asia-EU ocean cargo trade lane heats up

According the Paris-based consultancy, Alphaliner, these developments forebode that the “unrelenting rate war” is set to continue in 2012.
By Patrick Burnson, Executive Editor
December 27, 2011

Competition on the Asia-Europe trade will get even more intense next year as carriers are to restructure their networks and reshape their alliance partnerships, with more capacity additions on the horizon.

Last week, the Grand Alliance (Hapag-Lloyd, NYK, OOCL) and New World Alliance carriers (APL, HMM, MOL) announced the creation of a “G6 Alliance”, pooling the six carriers’ fleets on a consolidated Asia-Europe network.

This move closely follows the announcement of the MSC-CMA CGM alliance on the same trade. Both initiatives aim to counter Maersk, which currently offers the most complete coverage of the FE-North Europe trade with its “Daily Maersk” product launched in October.

According the Paris-based consultancy, Alphaliner, these developments forebode that the “unrelenting rate war” on the Asia-Europe trade is set to continue in 2012.

The Peak Season Surcharge which carriers commonly try to apply on the FE-North Europe trade in late December has been postponed by some shipping lines, as the expected year-end surge in bookings did not materialize. Carriers will have one last chance to raise rates in January prior to the Lunar New Year, which falls on January 23. However, with a weaker outlook for Chinese exports next year, any rate gains will likely be short-lived.

The much hoped for rationalization of Asia-Europe services is not bound to materialize, as the consolidation of services under the new partnerships fails to remove any excess capacity. New tonnage will continue to flow from shipyards,

“If one of Maersk’s intentions in launching the “Daily Maersk” product in October was to kill off its competitors with its comprehensive coverage of the FE-North Europe trade, the strategy is clearly not working out as planned,” said Alphaliner’s commercial director, Stephen Fletcher.

The “G6 Alliance” have unveiled their new line-up to match Maersk’s offering in 2012. This follows the move by MSC and CMA CGM which have also teamed up with a joint effort to match Maersk on the FE-North
Europe trade.

The remaining carriers in the trade will undoubtedly look to do the same, with none of the incumbent carriers interested in falling off on the wayside, Fletcher said.

“With all gloves off on the Asia-Europe trade in 2012, the rate war is expected to intensify - spelling disaster for all carriers on the trade,” he added.

About the Author

image
Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

While the economy has seen more than its fair share of ups and downs in recent years, 2014 is different in that it could be the best year from an economic output perspective in the last several years. That outlook was offered up by Rosalyn Wilson, senior business analyst at Parsons, and author of the Council of Supply Chain Management Professionals (CSCMP) Annual State of Logistics Report at last week’s CSCMP Annual Conference in San Antonio.

Matching last week, the average price per gallon of diesel gasoline dropped 2.3 cents, bringing the average price per gallon to $3.755 per gallon, according to the Department of Energy’s Energy Information Administration (EIA).

A number of key topics impacting the freight transportation and logistics marketplace were front and center at a panel at the Council of Supply Chain Management Annual Conference in San Antonio last week.

The relationships between third-party logistics (3PL) service providers and shippers are seeing ongoing developments due in large part to the continuing emergence and sophistication of omni-channel retailing. That was one of the key findings of The 19th Annual Third-Party Logistics Study, which was released by consultancy Capgemini Group, Penn State University, and Korn/Ferry International, a global talent advisory firm.

Optimism in the form of increasing profits was a key takeaway in the Annual Survey of Third-Party Logistics (3PL) CEOs, released earlier this week at the Council of Supply Chain Management Professionals (CSCMP) Annual Conference in San Antonio.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA