Business, Freight News, Logistics, Sea

Maersk cuts Asia-Med capacity

[ February 20, 2012   //   ]

Maersk Line said on 17 February that it would cut capacity on its Asia-Europe trade by 9% due to an oversupply of container vessels and unsustainably low rates. The move would be facilitated by a vessel sharing agreement with the French container shipping line, CMA-CGM, on its Far East to Mediterranean routes. The move is in contrast to Maersk’s earlier announcement that it was ending its cooperation agreement with CMA CGM on the Far East to north Europe trade.

Maersk Line CEO, Søren Skou. Said: “With this adjustment we are able to reduce our Asia-Europe capacity and improve vessel utilisation without giving up any market share we have gained over the past two years. We will defend our market share position at any cost, while focusing on growing with the market and restoring profitability.”
Maersk cited a report published in January by shipping analyst, Alphaliner, which predicted that Europe/Far East container traffic growth would slow to 1.5% in 2012 from an estimated 2.8% in 2011, due to a weakening economic outlook in Europe. At the same time, the industry container vessel fleet is set to grow by 8.3% in 2012.

Maersk Line’s chief product and yield officer Vincent Clerc, said: “The supply of vessels currently operating on this trade simply outweighs the demand. We are therefore rationalising our service by taking out vessel capacity and thereby reducing costs.”

Maersk Line added that it would consider additional opportunities to reduce capacity, including redelivery of time charter tonnage, lay-ups and slow-steaming and would not declare the option for the last ten Triple-E vessels.