Monday, October 15, 2012

Maersk Line removes 19 ships from Asia-Europe trade route

Maersk Line will take 19 ships from the Asia-to-Europe trade route to lower capacity and boost rates amidst low demand.

The company’s AE5 Service, which uses 8 ships, will be permanently canceled, as will the AE9 service, which employs 11 vessels, according to a statement from A.P. Moller-Maersk on Friday. This will reduce capacity on the route 21 percent in 2012, after February’s 9 percent reduction.

“Asia-Europe capacity is too great after the significant reduction in demand over the summer and companies are having to adjust much faster than they’re accustomed to,” said Peter Sand, chief analyst at BIMCO, a Danish shipping association.

Container rates from Asia fell below the break-even point in September as the demand for goods fell due to Europe’s economic crisis, reports shipbroker ICAP.

Container volumes may drop 3 percent in 2012, and Maersk announced more capacity cutting and slowed speeds could be implemented.

“There is currently no need for the number of ships sailing,” said Vincent Clerc, Maersk’s chief trade and marketing officer. He said that the company would adjust to lessened demand “without reducing our market position.”

For more of the Bloomberg story: bloomberg.com

More Newswire stories

ILA-USMX update: "Productive negotiations" to resume this week

China’s exports rise 10 percent in September, slowed economy may be stabilizing

JB Hunt trucking Q3 earnings up 14 percent

Port of Oakland maritime director uses $4,500 in public funds at strip club

Today's Cargo News Archives

Click to browse past stories on these topics:

Logistics

Ports & Infrastructure

Economic Outlook

Environmental Impact

Technology