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 - LM Editorial

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

The long-simmering court battle over whether FedEx Ground’s workers are independent contractors or employees appears headed to the appellate courts—and maybe the U.S. Supreme Court.

Carload volume headed up 4.3 percent to 298,376, and intermodal units, at 273,376 containers and trailers were up 4.8 percent annually.

In light on various service-related freight railroad service issues, the Department of Transportation’s Surface Transportation Board (STB) recently announced it is now requiring Class I railroads to publicly file weekly data reports on service performance. These weekly reports are slated to begin on October 22.

According to its data, spot market volume for the month of September was up 32 percent on an annual basis and set a new record for the 14th straight month, with gains for each of the three equipment categories it tracks, including load availability for: dry vans up 42 percent; refrigerated (reefer) up 24 percent; and flatbed volume up 46 percent.

FedEx Freight and Con-way Freight, two of the largest non-union LTL carriers in the nation, are battling organizing efforts by the Teamsters union in a closely watched unionization effort.

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers 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. Contact Patrick Burnson

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