Maersk reduces capacity on transpacific services following nine years of losses
Maersk has become the latest line to reduce transpacific container capacity, with an announcement that it is to close two services after revealing that the trade had made a loss in nine of the last 10 years.
In a customer advisory yesterday, Maersk said its TP5 service, connecting China’s Bo Hai Bay area and some of Japan’s major ports with Dutch Harbour, Oakland and Los Angeles will end on 15 January, the day before the carrier’s new east-west 2M partnership with Mediterranean Shipping Co comes into effect.
The line said: “Over the last decade the operating environment on the transpacific has been challenging, with the overall trade delivering unprofitable results for nine of the last 10 years, leading some to question the long-term health of the trade.
“As result, we have taken a detailed look at the economics of the trade with a focus on ensuring we secure our position.”
Maersk added that it would launch a revised TP5 product on 16 January, “for the Japan market, with reduced capacity covering Busan, Yokohama, Los Angeles, and Oakland”.
It will also axe its Taiwan Express service –Kaohsiung-Taipei-Oakland-Los Angeles – on 1 January, claiming that the economics of having such a high density of services into the US south-west coast no longer made sense.
“This by no means suggests our commitment to the transpacific trade has wavered. In fact, we see it very much the opposite,” said Maersk. “As we look forward to the future we want to continue playing a critical role in the supply chains of our customers on the trade.
“However, the long-standing downward pressure on profitability in the transpacific represents a serious risk to service levels. We will not take the lead but rely on the Transpacific Stabilisation Agreement to address the profitability challenge to the benefit of all stakeholders,” it said.
It would appear that the world’s largest shipping line will cease offering a direct connection between Taiwan and the US west coast, as none of the published 2M transpacific loops include calls at Taiwanese ports, particularly its main hub of Kaohsiung, which is perhaps in part a reflection of the shift in Asia manufacturing – the emerging Vietnamese export gateway of Vung Tau has won a direct call, while several calls will continue to be made at a range of Pearl River Delta ports, as well as Shanghai, Ningbo, Qingdao and Busan.
In addition, while the Malaysian transhipment hub of Tanjung Pelepas will become the starting point for 2M’s eastbound transpacific services, Singapore will act as the south-east Asian hub for the two Asia-US east coast services that will be routed through Suez – and both of which feature calls at Kaohsiung.
Separately, the line also announced the launch of two new services: one connecting the Middle East, Indian west coast, South Africa and West Africa; and a second between its relay hub of Salalah and Indian Ocean islands.
The weekly MESAWA service will launch on 24 January, employ 10 3,500teu ships and include calls at Jebel Ali, Mundra, Jawarharlal Nehru, Durban, Luanda, Apapa, Tincan, Cotonou, Port Elizabeth, Durban and Port Louis.
Starting 28 January, the Indian Ocean service will also have a weekly frequency and deploy three 2,000teu vessels and feature calls at Reunion, Mauritius, Madagascar and the Seychelles.
In a customer advisory yesterday, Maersk said its TP5 service, connecting China’s Bo Hai Bay area and some of Japan’s major ports with Dutch Harbour, Oakland and Los Angeles will end on 15 January, the day before the carrier’s new east-west 2M partnership with Mediterranean Shipping Co comes into effect.
The line said: “Over the last decade the operating environment on the transpacific has been challenging, with the overall trade delivering unprofitable results for nine of the last 10 years, leading some to question the long-term health of the trade.
“As result, we have taken a detailed look at the economics of the trade with a focus on ensuring we secure our position.”
Maersk added that it would launch a revised TP5 product on 16 January, “for the Japan market, with reduced capacity covering Busan, Yokohama, Los Angeles, and Oakland”.
It will also axe its Taiwan Express service –Kaohsiung-Taipei-Oakland-Los Angeles – on 1 January, claiming that the economics of having such a high density of services into the US south-west coast no longer made sense.
“This by no means suggests our commitment to the transpacific trade has wavered. In fact, we see it very much the opposite,” said Maersk. “As we look forward to the future we want to continue playing a critical role in the supply chains of our customers on the trade.
“However, the long-standing downward pressure on profitability in the transpacific represents a serious risk to service levels. We will not take the lead but rely on the Transpacific Stabilisation Agreement to address the profitability challenge to the benefit of all stakeholders,” it said.
It would appear that the world’s largest shipping line will cease offering a direct connection between Taiwan and the US west coast, as none of the published 2M transpacific loops include calls at Taiwanese ports, particularly its main hub of Kaohsiung, which is perhaps in part a reflection of the shift in Asia manufacturing – the emerging Vietnamese export gateway of Vung Tau has won a direct call, while several calls will continue to be made at a range of Pearl River Delta ports, as well as Shanghai, Ningbo, Qingdao and Busan.
In addition, while the Malaysian transhipment hub of Tanjung Pelepas will become the starting point for 2M’s eastbound transpacific services, Singapore will act as the south-east Asian hub for the two Asia-US east coast services that will be routed through Suez – and both of which feature calls at Kaohsiung.
Separately, the line also announced the launch of two new services: one connecting the Middle East, Indian west coast, South Africa and West Africa; and a second between its relay hub of Salalah and Indian Ocean islands.
The weekly MESAWA service will launch on 24 January, employ 10 3,500teu ships and include calls at Jebel Ali, Mundra, Jawarharlal Nehru, Durban, Luanda, Apapa, Tincan, Cotonou, Port Elizabeth, Durban and Port Louis.
Starting 28 January, the Indian Ocean service will also have a weekly frequency and deploy three 2,000teu vessels and feature calls at Reunion, Mauritius, Madagascar and the Seychelles.
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